MPC
Marathon Petroleum Corporation
$299.18
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 88.1% above fair value
You pay
$299.18
Bear
$57.25
Fair
$159.01
Bull
$278.23
Bear
$57.25
-80.9%
FCF $4195M × 10x
Fair
$159.01
-46.9%
FCF $4767M × 13x
Bull
$278.23
-7.0%
FCF $5339M × 16x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
24.8x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $280.00 from 33 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $159.01 per share.
Warnings
Debt per share ($105.11) is significant relative to the stock price. Even small changes in the debt figure meaningfully shift what each share is worth.
If oil drops to $60/barrel, the stock could fall -87%. Check whether the company can survive at low prices and still pay its dividend.
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Wall Street's average price target is $280.00 (from 33 analysts). Our estimate is 62% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential