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Marathon Petroleum (MPC) Gains But Lags Market: What You Should Know

Zacks Equity Research
Cantel (CMD) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

In the latest trading session, Marathon Petroleum (MPC) closed at $64.34, marking a +0.02% move from the previous day. The stock lagged the S&P 500's daily gain of 0.22%. At the same time, the Dow added 0.59%, and the tech-heavy Nasdaq gained 0.16%.

Heading into today, shares of the refiner had gained 9.11% over the past month, outpacing the Oils-Energy sector's gain of 2.53% and the S&P 500's gain of 0.49% in that time.

Investors will be hoping for strength from MPC as it approaches its next earnings release, which is expected to be February 7, 2019. On that day, MPC is projected to report earnings of $1.53 per share, which would represent year-over-year growth of 45.71%. Our most recent consensus estimate is calling for quarterly revenue of $33.19 billion, up 56.28% from the year-ago period.

It is also important to note the recent changes to analyst estimates for MPC. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 5.97% lower. MPC is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note MPC's current valuation metrics, including its Forward P/E ratio of 9.68. Its industry sports an average Forward P/E of 10.39, so we one might conclude that MPC is trading at a discount comparatively.

We can also see that MPC currently has a PEG ratio of 0.61. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Oil and Gas - Refining and Marketing stocks are, on average, holding a PEG ratio of 0.89 based on yesterday's closing prices.

The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 62, which puts it in the top 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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