Analyst Jean Ann Salisbury of Bank of America Securities reiterated a Hold rating on Marathon Petroleum (MPC – Research Report), with a price target of $146.00.
Jean Ann Salisbury has given her Hold rating due to a combination of factors affecting Marathon Petroleum’s financial outlook. The company’s recent earnings slightly exceeded expectations, primarily due to lower operating expenses in certain regions, but the overall financial picture remains cautious. The increase in buybacks, funded by debt, raises concerns about the sustainability of such financial maneuvers without additional free cash flow. Additionally, while Marathon is investing in its California operations, the broader market faces challenges such as potential overcapacity in LPG exports and falling oil prices, which could impact future growth.
Despite these investments, the competitive landscape in California and regulatory pressures pose risks, leading to a cautious outlook. The company’s strategic decisions, such as maintaining a strong asset base in the PADD5 region, are seen as positive, but the potential for tariff-related risks and market volatility remain overhangs. Therefore, the Hold rating reflects a balanced view of the company’s current strengths and the uncertainties it faces in the near term.
MPC’s price has also changed slightly for the past six months – from $155.250 to $144.550, which is a -6.89% drop .