MPC
Marathon Petroleum Corporation
$254.65
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 77.0% above fair value
You pay
$254.65
Bear
$51.81
Fair
$143.90
Bull
$251.79
Bear
$51.81
-79.7%
FCF $4195M × 10x
Fair
$143.90
-43.5%
FCF $4767M × 13x
Bull
$251.79
-1.1%
FCF $5339M × 16x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
22.0x
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 $229.63 from 33 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $143.90 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 -85%. 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 $229.63 (from 33 analysts). Our estimate is 53% 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