Marathon Petroleum might be a household name for retail investors, but it ( NYSE:MPC ) has climbed 19% year-to-date and more than 28% over the past year, with Reddit sentiment tracking right alongside it. ...

Core Viewpoint - Marathon Petroleum's strong midstream income supports its dividend even if refining margins decline, with significant cash returns to shareholders expected to continue [1][2]. Financial Performance - In the fourth quarter, Marathon Petroleum reported adjusted earnings of $4.07 per share, exceeding analyst expectations, driven by refining margins capturing 114% of the benchmark crack spread, an increase from 96% in the previous quarter [1]. - Cash from operations reached $2.7 billion, nearly 60% higher than the previous year [1]. Shareholder Returns - The company returned $4.5 billion to shareholders through share repurchases and dividends during the year, with expectations for stronger cash returns moving forward [2]. Cash Flow Model - Marathon operates on a two-pronged cash flow model, with its midstream subsidiary MPLX LP generating fee-based income from pipelines and processing plants [3]. - MPLX distributions to Marathon are projected to exceed $3.5 billion annually over the next two years, up from $2.8 billion [6]. Refining Segment - The refining segment processes over 3 million barrels per day, with a refining margin of $18.65 per barrel in the fourth quarter, a 44% year-over-year increase [4]. - The refining segment accounts for approximately half of the company's adjusted EBITDA [8]. Market Outlook - Management anticipates tight global refining supply and steady distillate demand through 2026, with regional refinery closures tightening the domestic market [8]. - The stock is currently valued at around $200 per share, with a 1.9% dividend yield, and is considered fairly valued given its midstream stability [9].

Core Insights - Marathon Petroleum (MPC) and Phillips 66 (PSX) reported strong fourth-quarter earnings, highlighting their significant roles in the thriving energy sector, with the Energy Select Sector SPDR Fund up 20.22% year-to-date [1] Group 1: Financial Performance - Marathon Petroleum achieved an EPS of $4.07, exceeding the $2.91 estimate, with a net income of $1.535 billion, nearly doubling from $371 million in Q4 2024 [1] - Phillips 66 reported an adjusted EPS of $2.47, surpassing the $2.19 estimate, with a GAAP net income of $2.9 billion [1] - Marathon generated $6.8 billion in full-year free cash flow, while Phillips 66 generated $2.7 billion [1] Group 2: Operational Metrics - Marathon's refining utilization was at 95%, with a refining margin of $18.65 per barrel [1] - Phillips 66 operated its refineries at 99% crude capacity utilization, achieving a record 88% clean product yield [1] Group 3: Shareholder Returns - Marathon returned $4.5 billion to shareholders through buybacks in 2025, with $4.4 billion remaining in authorization [1] - Phillips 66 offers a higher dividend yield of 3.04%, having raised its quarterly payout to $1.27 per share for Q1 2026 [1] Group 4: Strategic Focus - Marathon operates as a pure-play refining and midstream business, focusing on high-utilization refining assets and strategic midstream investments [1] - Phillips 66 diversifies its operations across refining, midstream, chemicals, and renewable fuels, reducing debt by $2 billion in 2025 [1] Group 5: Investment Considerations - Marathon's concentrated strategy has resulted in stronger free cash flow and year-to-date price performance, with a 23.3% gain compared to Phillips 66's 22.6% [1] - Phillips 66's diversification provides downside protection against refining volatility, while Marathon's focus on refining has yielded superior cash flow [1]

Marathon Petroleum Corporation (MPC), headquartered in Findlay, Ohio, functions as an integrated downstream energy company. Valued at $61.1 billion by market cap, the company refines, supplies, markets, and transports petroleum products. Shares of refining giant have outperformed the broader market over the past year. MPC has gained 31.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 11.8%. In 2026, MPC stock is up 25%, surpassing the SPX’s marginal fall on a YTD basis. ...

Core Viewpoint - Marathon Oil reported Q4 2026 earnings that exceeded market expectations in both revenue and adjusted earnings per share, leading to a rise in stock price during pre-market trading [1][2]. Financial Performance - For Q4 2026, Marathon Oil's revenue was $33.422 billion, surpassing the market expectation of $31.981 billion; adjusted earnings per share were $4.07, significantly higher than the analyst forecast of $2.90 [2]. - The company outlined a capital allocation plan for 2026, with a total investment of $1.5 billion, of which $1.41 billion is allocated to refining and marketing [2]. Stock Performance - Over the past week (February 7 to 13, 2026), Marathon Oil's stock exhibited volatility, with a notable drop of 5.09% on February 12, closing at $198.02, followed by a rebound to $201.34 on February 13, marking a 1.68% increase [3]. - The stock reached a high of $210.32 and a low of $195.75 during this period, with a total fluctuation of 7.18%; year-to-date, the stock has risen by 23.80%, outperforming the overall oil and gas sector [3]. Institutional Perspectives - Recent ratings for Marathon Oil have been positive, with Goldman Sachs raising the target price to $211 while maintaining a "Buy" rating; Wells Fargo increased its target to $217, and BMO Capital Markets raised its target from $200 to $225, also maintaining a "Buy" rating [4]. - Citigroup adjusted its target price from $182 to $210, keeping a "Hold" rating; Goldman Sachs noted that Marathon Oil is viewed as a "crowded long" position, reflecting optimism about its cyclical recovery potential [4]. Recent Developments - On February 4, 2026, the company announced the purchase of two tankers of Venezuelan crude oil, aiming to process more heavy crude, which may increase demand and impact the supply chain [5]. - In the external environment, OPEC+ is considering a production increase in April, and geopolitical factors (such as US-Iran negotiations and production recovery post-cold snap) are supporting oil price volatility; Morgan Stanley and Barclays have recently raised their oil price forecasts to above $70, emphasizing geopolitical risk premiums and demand resilience [5].

Core Insights - Marathon Petroleum Corporation (NYSE:MPC) experienced a significant share price increase of 15.46% from February 2 to February 9, 2026, marking it as one of the top-performing energy stocks during that week [1]. Company Performance - Marathon Petroleum is recognized as a leading integrated downstream energy company, operating the largest refining system in the United States [2]. - The company reported strong Q4 2025 results on February 3, with adjusted earnings of $4.07 per share, surpassing forecasts by $1.36. Revenue for the quarter reached $33.42 billion, exceeding estimates by nearly $3 billion [3]. - The refining margin for Q4 was reported at $18.65 per barrel, reflecting a year-over-year increase of over 44%. This surge contributed to refining and marketing earnings of approximately $2 billion, a significant rise from $559 million the previous year [4]. - During Q4, Marathon operated its refineries at about 95% capacity, achieving a total throughput of just over 3 million barrels per day. Notably, both the Garyville refinery in Louisiana and the Robinson refinery in Illinois set monthly crude throughput records [4]. Analyst Ratings - On February 4, TD Cowen analyst Jason Gabelman raised the price target for Marathon Petroleum from $183 to $198 while maintaining a 'Buy' rating. Other analysts from Citi, UBS, and Wells Fargo also increased their price targets following the company's strong Q4 performance [5].

Core Viewpoint - The Zacks Oil and Gas - Refining & Marketing industry faces significant challenges due to margin volatility and rising operational costs, yet it has outperformed the broader energy sector and S&P 500 over the past year, presenting selective investment opportunities in companies like Phillips 66, Marathon Petroleum, and Valero Energy [1][10]. Industry Overview - The industry includes companies that refine petroleum products and non-energy materials, with profitability heavily influenced by refining margins, inventory levels, and demand patterns [2]. - Refining margins are volatile and affected by various factors including crude prices, product demand, and regional capacity utilization [2]. Trends Defining the Industry's Future - Margin volatility and demand uncertainty are persistent risks, with crack spreads subject to rapid changes due to external factors like weather and refinery operations [3]. - Operational flexibility and strong export linkages are crucial for managing volatility, allowing refiners to optimize yields and respond to market demands effectively [4]. - Rising costs and regulatory pressures pose challenges, with maintenance and compliance expenses increasing, which can compress margins and create operational risks [5]. Industry Rank and Outlook - The industry currently holds a Zacks Industry Rank of 197, placing it in the bottom 19% of 243 Zacks industries, indicating a bearish outlook [7]. - Analysts have revised earnings estimates downward, with a 17.5% decrease in the industry's earnings estimate for 2026 over the past year [8]. Performance Metrics - The industry has increased by 24.7% over the past year, outperforming the broader energy sector's 17% increase and the S&P 500's 16.8% gain [10]. - The current EV/EBITDA ratio for the industry is 5.05X, significantly lower than the S&P 500's 17.20X and the sector's 6.07X [13]. Company Highlights - **Phillips 66**: A major independent refiner with a refining capacity of nearly 2 million barrels per day, expected EPS growth rate of 25%, and shares have gained 21.6% in a year [16][17]. - **Marathon Petroleum**: A significant independent refiner with access to lower-cost crude, expected EPS growth of 18.8%, and shares have increased by 31.5% in a year [19][20]. - **Valero Energy**: Operates 15 refineries with a throughput of about 3.2 million barrels per day, expected EPS growth of 15.7%, and shares have risen by 47.1% in a year [21][22].

Group 1 - TD Cowen analyst Jason Gabelman raised the price target on Marathon Petroleum (MPC) to $198 from $183 while maintaining a Buy rating on the shares [1] - The firm's updated model reflects earnings that exceeded expectations due to refining gross margin aligning with historical capture [1] - First quarter 2026 throughput and operating expenses will be affected by turnarounds, but operations are expected to improve thereafter with lower year-over-year turnaround spending and future declines [1] Group 2 - Margins are anticipated to benefit from seasonality [1]

Core Insights - Marathon Petroleum Corporation (MPC) reported fourth-quarter adjusted earnings per share of $4.07, significantly exceeding the Zacks Consensus Estimate of $2.73 and up from the year-ago adjusted profit of 77 cents, driven by strong performance in the Refining & Marketing segment and a 4.9% year-over-year decline in costs and expenses [1][2] Financial Performance - The company reported revenues of $33.4 billion, surpassing the Zacks Consensus Estimate of $29.6 billion, although this represented a slight decline of 0.1% year-over-year due to lower sales and reduced income from equity-method investments [2] - MPC distributed approximately $1.3 billion to shareholders in the fourth quarter and had $4.4 billion remaining under its share repurchase authorizations as of December 31, 2025 [3] Segment Analysis - The Refining & Marketing segment achieved an adjusted EBITDA of $2 billion, a 75.8% increase from the previous year's $1.1 billion, exceeding the consensus estimate by 26.7% [4] - The refining margin improved to $18.65 per barrel from $12.93 in the prior-year quarter, reflecting stronger crack spreads and beating the consensus estimate by 6.5% [5] - Refining capacity utilization was reported at 95%, up from 94% in the year-ago period [5] - The Midstream segment's adjusted EBITDA remained flat year-over-year at $1.7 billion, missing the consensus estimate by 3.7% due to higher operating costs and divestitures [7] Expense and Capital Expenditure - Total expenses for the fourth quarter were $30.7 billion, down from $32.3 billion in the previous year [8] - Capital expenditures for the quarter totaled $1.5 billion, with 31% allocated to Refining & Marketing and 67% to the Midstream segment [8] Future Guidance - MPC expects refining operating costs to average approximately $5.85 per barrel in the first quarter of 2026, with total refinery throughputs projected at about 2,740 thousand barrels per day [10] - Planned refining turnaround expenses for 2026 are expected to total approximately $1.35 billion, indicating a decline from 2025 levels [12] - The company anticipates that distributions from MPLX will fully fund MPC's dividends and standalone capital spending in 2026, with plans to return excess free cash flow to shareholders [15]

Group 1 - Oil prices have risen for the second consecutive day due to geopolitical tensions following the U.S. downing of an Iranian drone near an aircraft carrier, with WTI crude approaching $64 per barrel and Brent crude above $67 per barrel [1] - The American Petroleum Institute reported a decrease of 11.1 million barrels in U.S. crude oil inventories last week, which, if confirmed by official data, would mark the largest weekly decline since June [4] - Concerns about potential conflicts in the Middle East, a region that accounts for about one-third of global oil production, have contributed to rising oil prices despite signs of oversupply [4] Group 2 - The energy sector in the U.S. stock market has also seen gains, with the S&P Energy sector rising by 3.24%, and notable increases in companies such as Valero Energy (VLO.US) and Marathon Oil (MPC.US) by 6% [5] - ExxonMobil (XOM.US) and Occidental Petroleum (OXY.US) saw increases of over 3%, while Chevron (CVX.US) and Devon Energy (DVN.US) rose by 2% [5] Group 3 - The geopolitical situation is further complicated by incidents such as the harassment of a U.S.-flagged tanker by Iranian vessels in the Strait of Hormuz, a critical trade route for oil and liquefied natural gas [4] - OPEC+ is expected to see a gradual increase in global oil demand starting from March or April, which may help balance market supply and demand [4]