Stock price when the opinion was issued
From a PE valuation standpoint, refiners tend to work together. You see spreads widen or narrow off the raw product of oil, into the different commercial products. This company has been a good performer over the years. Not having great visibility into the cycle and to the spreads, he would probably pass on making this a core holding.
MPC is now trading at 8.2x times' Forward P/E. In the most recent quarter, MPC’s revenue declined 32% to $36.8B, beating estimates of $33.9B and adjusted EBITDA came down from $9B to around $4.5B; the decline was largely expected after high oil prices in 2022. The balance sheet is strong, with net debt of $17.1B and net debt/EBITDA of around 0.8x. Given the record cash flow generated from the oil tailwind in the last few years, the company has implemented one of the more aggressive share-repurchasing programs. Going forward, MPC’s fundamentals and share price would be heavily affected by the movement in oil prices. However, we think MPC just had a solid quarter, and still looks cheap, while MPC is fully committed to buying back more shares. We would be comfortable buying in the context of the sector.
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He sees resistance around $51. The chart shows a double top in 2015. This is a good indicator that the 2nd time the bulls tried to do it, they got exhausted. Currently the chart is showing a nice upward trend. He likes energy. If this breaks above $51, he would be keen to add.