Marathon Petroleum Corp (MPC) Stock Analysis
Marathon Petroleum Corp
▾ What's in the 36/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend, DCF applicability). It excludes the Altman Z score, whose retained-earnings input this filer does not report separately. See the Financial Health section for the full balance-sheet read.
How to read MPC (cyclical commodity producer)
A miner or energy producer earns whatever the commodity price is, so a single DCF swings with the cycle. Judge it against peers and where you think the commodity cycle is heading.
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EV/Sales peer comparison ↓
How the price compares to similar producers is more meaningful than a through-cycle DCF.
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Interactive calculator (test cycle assumptions) ↓
Flex the growth/discount inputs to see how sensitive the value is to where we are in the cycle.
Is now a good time to buy MPC?
Macro: Neutral / mid-cycleMPC trades at $395.93 vs an estimated intrinsic value of $410.81 — a 3.6% gap vs mid-cycle reference. Low confidence: commodity prices and normalized margins dominate this result. MPC is a cyclical commodity producer (Petroleum Refining), so a single growth-DCF is the wrong tool — its profits rise and fall with the commodity price. We value it off normalized, mid-cycle cash flow, which is why the modeled growth reads near 0%: we deliberately don't extrapolate growth from a possibly-elevated base. A premium here usually just means today's price sits above mid-cycle worth — common when the commodity is near a cycle high (near a trough the same model would read "cheap"). On its own that's not a sell signal — judge it against its peers and where you think the cycle is heading.
Not investment advice. The model can be wrong. Verify the assumptions in the sections below and consider consulting a licensed advisor for significant decisions.
What return would MPC pay as a bond?
Treat the share as a bond: the "coupon" is the cash an owner could take out this year, and unlike a real bond that coupon can grow. Fix today's price and a conservative growth path, and the only unknown left is the return. That number is comparable across every kind of company — which is the point.
Plainly: at $395.93, MPC pays a 6.4% owner-earnings coupon today. If that coupon grows 3.0% a year for five years and then settles toward 2.5%, and a buyer in year 10 pays 15× that year's owner earnings, the whole trade returns about 9.1% a year — 4.1 points more than a Treasury with none of the business risk. By year 5 the coupon on today's price would be 7.4% (the "yield on cost" Buffett talks about). Our DCF demanded 7.6% for a business this risky; this read clears that bar, which is the same conclusion the verdict above reaches by a different route.
What cash-flow improvement must the market believe? Reverse DCF — Instead of asking "what is this stock worth?", asks "what growth rate is the current market price already assuming?"
Why it matters: It crystallizes the bull thesis as a single number you can argue with. If the market expects 40% growth for 10 years and you do not believe that, the stock is overvalued.
Reference: 10–15% = sustainable for strong companies · 20–25% = exceptional · 30%+ = historically very rare
Reverse DCF treats today's price as correct and solves for the cash-flow path that justifies it. For a cyclical, read the result as the annual improvement in through-cycle free cash flow the price requires — which could come from higher realized commodity prices, margin recovery, lower input costs, more volume, or reduced capex, not just organic growth. The starting base is our normalized mid-cycle median, not last year's number.
Why it matters: A company can show big profits on paper while burning through cash. FCF is what actually fills the bank account.
Reference: Healthy mature businesses convert 8–15% of revenue into FCF · Growth companies often negative
Full explanation → must improve by:
▾ Exactly how this 10-year figure is computed
Forecast length: 10 years, single flat growth rate (no fade)
Terminal growth after year 10: 2.4%
Discount rate: 7.6% (the rate the model used)
Price used: $395.93 — the live price shown on this page (not frozen)
Method: solve for the constant annual growth rate that makes the discounted 10-year FCF stream + terminal value equal today's price.
Almost any healthy business should clear this bar. Likely undervalued unless something serious is wrong.
For reference: A low bar — most financially healthy companies clear this comfortably.
▾ How we computed this · Reality check thresholds · Assumptions
- Starting FCF/share: $20.41 (mid-cycle estimate (median operating cash flow less estimated maintenance capex and stock compensation — by design NOT the table's FCF, which deducts every year's full capex))
- Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation →: 7.6% — standard 8-12%; 9-10% matches S&P 500 historical return - Terminal Growth RateTerminal Growth Rate — The growth rate we assume the company holds forever, after the explicit 10-year forecast period ends.
Why it matters: It anchors the long-tail value. Cannot mathematically exceed long-term GDP growth or the company eventually becomes larger than the global economy.
Reference: 2–3% (matches long-term US GDP growth) · Above 4% is mathematically problematic
Full explanation →: 2.4% — matches long-term GDP growth - Forecast horizon: 10 years explicit + terminal perpetuity
| ≤ 0% | Priced for decline — likely undervalued OR dying business |
| 5-12% | Reasonable; sustainable for quality businesses |
| 12-18% | Demanding — strong execution required |
| 18-25% | Exceptional — few companies sustain for a decade |
| 25-35% | Heroic — historically very rare |
| 35%+ | Borderline impossible at scale |
Sustaining 30%+ cash-flow growth for a full decade at scale is exceedingly rare — the bar is brutally high.
Use the interactive calculator below to change the discount rate, growth and terminal-growth assumptions and watch the value move.
Football field: where does the price sit?
Different valuation methods produce different fair-value ranges depending on assumptions. Plotting them together lets you see at a glance whether the current price is reasonable across approaches, or only one specific lens.
Industry multiples sourced from: sector: Energy. See the Peer Basket section below for the peer comparison and its limited-comparables caveat.
How does MPC stack up against its closest peers?
We take the 4 same-industry companies most similar to MPC (similar size) and check what investors are paying for each dollar of their revenue (or profits). If MPC is much more expensive on the same yardstick, that's a red flag — unless you have a specific reason it deserves a premium. For a leveraged business, EV/EBIT and FCF yield (both in the table) are usually more reliable than EV/Sales, because revenue multiples ignore differences in margins and debt.
▾ What's "EV / Sales" in plain English?
EV (Enterprise Value) = market cap + total debt − cash. It's "what you'd pay to buy the entire company outright" — you pay the market cap to shareholders and take over their debt, but you keep their cash. EV is fairer than market cap alone because it includes the debt the new owner inherits.
EV / Sales = EV ÷ annual revenue. So "2.5×" means investors pay $2.50 of enterprise value per $1 of yearly sales. Higher = market is paying more per dollar of sales (usually because they expect future growth or fat margins).
p25 / median / p75 are the 25th, 50th (middle), and 75th percentile of the peers' multiples. Half the peers fall between p25 and p75. The median (p50) is the typical peer — that's the benchmark we compare to.
| EV / SalesEV / Sales — For every $1 of yearly revenue, this is how many dollars investors pay to own the whole business (including debt). Why it matters: Works for pre-profit growth companies where P/E and FCF don't apply. The most apples-to-apples cross-company multiple because it ignores accounting choices. Reference: 1–3x for mature companies · 4–10x for software/SaaS · 10–20x for hypergrowth · >20x is rare and demanding Full explanation → |
1.0x / 2.5x / 3.2x |
Bold middle number = median peer. Half the peers trade above it, half below. Computed over 4 same-industry peers; implausible multiples excluded.
⚠️ Important caveat: peer multiples only work if the peers are genuinely comparable. Always check the peer list below — if the auto-picker grabbed micro-caps or unrelated businesses, the comparison is noise. A medical-device giant priced against tiny biotech startups won't produce a useful signal.
▾ View peer list (8)
| Ticker | Company | Industry | Mcap | EV/Sales | EV/GP | EV/EBIT | FCF Yield |
|---|---|---|---|---|---|---|---|
| VLO | VALERO ENERGY CORP/TX | Petroleum Refining | $112.4B | 1.0x | — | 38.7x | 3.7% |
| COP | CONOCOPHILLIPS | Petroleum Refining | $165.0B | 3.2x | — | — | 5.5% |
| SU | SUNCOR ENERGY INC | Petroleum Refining | $74.4B | — | — | — | — |
| CVX | CHEVRON CORP | Petroleum Refining | $422.9B | 2.5x | — | — | 4.6% |
| PBR | PETROBRAS - PETROLEO BRASILEIRO SA | Oil & Gas Extraction ·fallback | $78.9B | 1.1x | 2.2x | 3.7x | 72.0% |
| TTE | TotalEnergies SE | Oil & Gas Extraction ·fallback | $202.8B | 1.3x | — | — | 7.1% |
| MPLX | MPLX LP | Pipelines ·fallback | $55.5B | 5.9x | — | 9.6x | 7.8% |
| SHEL | Shell plc | Oil & Gas Extraction ·fallback | $275.3B | 1.3x | — | — | 12.7% |
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
We can't produce a trustworthy Altman Z here: retained earnings weren't separately reported in our data, so a core input would have to be fabricated. Rather than show a categorical "distress" verdict from an invented number, we mark it unavailable. Judge financial health from the leverage, cash position, and the measurable Piotroski checks instead.
▾ The checks — what passed, what didn't (and what we couldn't measure)
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✓ Positive net incomeNet income $4,047.0M in FY2025.
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✓ Positive operating cash flowOperating cash flow $8,253.0M (was $8,665.0M the prior year).
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✓ Cash flow backs up reported profitOperating cash flow $8,253.0M vs net income $4,047.0M.
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✓ Return on assets improvingReturn on assets 4.8% vs 4.4% a year ago.
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✓ Debt load (vs assets)Total debt is 2.8% of assets vs 3.9% a year ago ($2,371.0M of $83,955.0M assets).
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✓ Short-term liquidity (current ratio)Current ratio 1.26x vs 1.17x a year ago.
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✓ Share count (dilution)Share count declined 10.3% (341.0M → 306.0M year-over-year), so the no-dilution check passed. (One-year change; the multi-year buyback pace can differ.)
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· Pricing power (gross margin) (n/a — data not reported; not scored)
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✗ Sales per asset (asset turnover)Asset turnover 1.58x vs 1.76x a year ago.Why this matters: Asset turnover measures how much revenue each dollar of assets generates. Rising = more productive use of the asset base.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
What if you assume different inputs?
Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation → (the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 7.6%, the figure our model used for MPC. Open Advanced to also change beta, growth and the rate path.
Note: the calculator opens at our published value of $410.81 — it is initialised to the same scenario-weighted result, so the two match exactly on load. The moment you move a slider, the value below becomes a single-path what-if at your assumptions (not the three-scenario weighting), which is why it can differ from the headline once you've touched it.
7.6% — beta-based (CAPM), from this stock's BetaBeta — How much the stock moves when the overall market moves. 1.0 = moves with the market; 1.5 = moves 50% more than the market.
Why it matters: Higher beta = more volatile = should demand higher discount rate. Low beta stocks (utilities, consumer staples) move less.
Reference: Most stocks 0.5–1.5 · Defensives ~0.3 · High-vol tech ~1.5–2.0
Full explanation → of 0.56. The safe Treasury rate plus a premium scaled by how much more (or less) volatile the stock is than the market.
11.0% — sector/quality tier. A simpler hurdle set by industry and business durability: lower for stable, wide-moat companies; higher for speculative or micro-caps.
The headline value and this calculator start at 7.6% — the beta-based rate. Drag the slider to the other rate to see the full range.
-3.6%
At the default assumptions the flat path lands near our published value of $410.81. Move any slider to recompute it with your own.
Move any slider above to recompute this against your own assumptions.
⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
Marathon Petroleum Corp (MPC) appears deeply undervalued by the model, trading at a 3.6% discount to its intrinsic valueIntrinsic Value — Our DCF model's estimate of what each share is mathematically worth based on projected cash flows.
Why it matters: Compare to current price. Below IV = potentially undervalued. Above IV = priced for growth that must actually happen.
Reference: Model-derived; quality depends on data and assumptions.
Full explanation →. This discount likely reflects investor concerns over the company's rising long-term debt, which has increased from $571M to $2371M. The primary quantifiable risk is the implied decline rate of 5.5% compared to the model's 3.0%.
As of 3 months ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What's free cash flow / what do these mean?
Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.
Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.
Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.
Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Trends in long-term debt reduction
- Operating cash flow generation in subsequent quarters
- Refining margin performance
The trend, in plain numbers (FY2024 → FY2025, latest reported)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Net income grew +17% to $4.05B.
- Revenue fell -4% to $132.70B.
- Free cash flow fell to $4.61B.
Management & Leadership
Michael J. Hennigan serves as the Chief Executive Officer of Marathon Petroleum Corp, a role he has held since 2020. He previously served as CEO of MPLX, a midstream company formed by MPC. John J. Quaid is the Executive Vice President and Chief Financial Officer.
What They Make
Marathon Petroleum Corp is a leading independent refiner, transporter, and marketer of petroleum products. It primarily processes crude oil into various refined products like gasoline, distillates, and asphalt, which are sold to wholesale and retail customers.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
The market prices MPC at a 3.6% discount to the model's intrinsic valueIntrinsic Value — Our DCF model's estimate of what each share is mathematically worth based on projected cash flows.
Why it matters: Compare to current price. Below IV = potentially undervalued. Above IV = priced for growth that must actually happen.
Reference: Model-derived; quality depends on data and assumptions.
Full explanation →. This pricing suggests investor caution, likely due to the significant increase in long-term debt from $571M to $2371M, which could signal increased financial risk despite positive operating cash flow. The market may also be factoring in the company's relatively flat revenue growth of 2.6%/yr over four years.
Three Scenarios, Weighted
| Scenario | IV | Upside from today's price | Weight |
|---|---|---|---|
| Conservative | $350.06 | -11.6% | 40% |
| Base | $417.94 | 5.6% | 35% |
| Optimistic | $498.01 | 25.8% | 25% |
| Weighted | $410.81 | 3.8% | 100% |
Reading the last column: it is the move from today's price to each value (IV ÷ price − 1). The headline "premium/discount to model IV" measures the same gap from the value's side (price ÷ IV − 1), so the two percentages differ in size and sign by construction — e.g. a price 8% above value is a value 7.4% below price.
What has to be true
Today's price implies a material multi-year contraction in cash flow (implied growth ≈ -5.5%/yr) — so historical growth anchors don't apply here. The real question isn't "can it grow like Apple did" but "is the decline the market is pricing in real, or an overreaction?" The Financial Health trend and the Reverse-DCF above are the right lenses for that.
Business Model & Valuation
How They Make Money
The company operates in a cyclical sector and uses normalized cash flow for valuation, with a median operating cash flow of $8.66B and estimated maintenance capex of $2.42B.
Normalized FCF High
Cyclical/commodity sector (Petroleum Refining): normalized FCF uses 5-year median to smooth peak/trough distortions.
Show advanced inputs
| Revenue Growth | 2.6% |
| Eps Growth | -3.5% |
| Historical Fcf Growth | 13.2% |
| Sector Default | 4.0% |
| Best Estimate | 3.0% |
| Method | blend(70% revenue_cagr, 30% sector) |
| Growth Basis | total |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project its revenue segments independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue has been roughly flat, growing at 2.6%/yr over four years.
Geography & Markets
Marathon Petroleum Corp primarily operates within the United States, with significant refining and marketing operations across various regions. Exact geographic segment splits are not available from current data sources.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)52.0NeutralMomentum is balanced — neither overbought nor oversold.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BearishLine below signalThe fast trend is below the slow trend — short-term momentum is currently downward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (3 notes — click to expand/collapse)
Guardrail Notes (3)
- Cyclical sector: using normalized cash flow (median OCF minus estimated maintenance capex).
- Median OCF: $8.66B, est. maintenance capex: $2.42B, normalized FCF: $6.25B.
- Terminal growth (2.5%) capped to 2.4% (80% of near-term growth 3%).
FINANCIALS
Financial Statements (5-year tables — click to expand)
From Marathon Petroleum Corp's SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 132.7B | 4.0B | $13.22 |
| 2024 | 138.9B | 3.4B | $10.08 |
| 2023 | 148.4B | 9.7B | $23.63 |
| 2022 | 177.5B | 14.5B | $28.12 |
| 2021 | 120.0B | 9.7B | $15.24 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC & adj. | Free Cash Flow |
|---|---|---|---|---|
| 2025 | 8.3B | 3.5B | 160.0M | 4.6B |
| 2024 | 8.7B | 2.5B | 137.0M | 6.0B |
| 2023 | 14.1B | 1.9B | 211.0M | 12.0B |
| 2022 | 16.4B | 2.4B | 153.0M | 13.8B |
| 2021 | 4.4B | 1.5B | 88.0M | 2.8B |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 8.3B − 3.5B − 160.0M (SBC & adj.) = 4.6B. This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a mid-cycle estimate (median operating cash flow less estimated maintenance capex and stock compensation — by design NOT the table's FCF, which deducts every year's full capex), not this single year.
Balance Sheet
| Total Assets | 84.0B |
| Total Liabilities | 59.9B |
| Equity | 17.3B |
| Total Debt | 2.4B |
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