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Research Alert: CFRA Lifts View On Shares Of Marathon Petroleum To Buy From Hold

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-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

We raised our 12-month target price by $56 to $277, reflecting a combination of relative valuation and DCF models. On a relative basis, we apply a 7.9x multiple of enterprise value to projected 2027 EBITDA, slightly above the peer average. We think a peer premium is reasonable on the basis of a superior return on invested capital. This approach yields a value of $275 per share. Meanwhile, our DCF model, using free cash flow growth of 9.5% per year for 10 years, 2.0% thereafter, discounted at a WACC of 7.2%, yields a value of $279 per share. We lift our 2026 EPS estimate by $13.83 to $26.74 and 2027's by $8.03 to $21.57. MPC should benefit from a widening spread between Western Canada Select and WTI crudes, which benefit its Midwestern refineries, as well as a wide spread between Brent and WTI that has blown out since the start of the U.S.-Iran conflict. We think that, even if the conflict ended today, it could easily take until 2027 to restore energy markets to square one.

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