Breaking Down Marathon Petroleum Corporation (MPC) Financial Health: Key Insights for Investors

As an investor, are you keeping a close watch on financial health? Did you know that in 2024, the company generated $8.7 billion in net cash from operations, enabling a peer-leading capital return of $10.2 billion to shareholders? But how does this stack up against their overall financial picture? In 2024, the company's revenue stood at $138.864 billion, with a net income of $3.445 billion. Let's dive into a detailed analysis of financial performance, dissecting key metrics and exploring what they mean for investors like you.

Marathon Petroleum Corporation (MPC) Revenue Analysis

Marathon Petroleum Corporation's financial health is significantly shaped by its diverse revenue streams. Understanding these streams and their performance is crucial for investors. Breaking Down Marathon Petroleum Corporation (MPC) Financial Health: Key Insights for Investors

Here’s a breakdown of the key aspects:

Primary Revenue Sources:

• Refining and Marketing: This segment involves refining crude oil and other feedstocks into transportation fuels, specialty products, and petrochemicals. It also includes the marketing of these products through various channels.
• Midstream: This segment focuses on transporting, storing, and gathering crude oil, refined products, and other hydrocarbons. Activities are primarily conducted through MPLX LP, a master limited partnership.

Year-over-Year Revenue Growth Rate:

Analyzing historical revenue trends provides insights into the company's performance. While specific percentage increases or decreases fluctuate annually based on market conditions, tracking these trends helps assess Marathon Petroleum's ability to grow its revenue consistently.

In 2024, Marathon Petroleum reported revenues of $144.33 billion, a decrease of 8.28% compared to the previous year. This reflects the impact of fluctuating commodity prices and refining margins on the company's financial performance.

Contribution of Different Business Segments to Overall Revenue:

The refining and marketing segment typically contributes the majority of Marathon Petroleum's revenue due to the large scale of its operations. The midstream segment, while smaller, plays a crucial role in supporting the refining operations and generating stable fee-based revenue.

For the fiscal year 2024:

• Refining & Marketing: Generated $136.9 billion in revenues.
• Midstream: Accounted for $9.7 billion in revenues.
• The remaining revenue comes from the company's other operations.

Analysis of Significant Changes in Revenue Streams:

Changes in revenue streams can occur due to various factors, such as:

• Acquisitions and Divestitures: Strategic acquisitions or divestitures can significantly alter Marathon Petroleum's revenue mix.
• Market Conditions: Fluctuations in crude oil prices, refining margins, and demand for refined products can impact revenue.
• Operational Improvements: Increased efficiency and throughput in refining operations can lead to higher revenue.

For instance, shifts in demand for transportation fuels, influenced by economic conditions or regulatory changes, can affect the refining and marketing segment's revenue. Similarly, changes in pipeline capacity or tariffs can impact the midstream segment's performance.

Understanding these factors is essential for investors to assess the sustainability and growth potential of Marathon Petroleum's revenue streams.

Marathon Petroleum Corporation (MPC) Profitability Metrics

Marathon Petroleum Corporation (MPC) profitability can be assessed through its gross profit, operating profit, and net profit margins. These metrics reveal how efficiently MPC converts revenue into profit at different stages. Examining these figures over time provides insights into the company's ability to sustain and grow its earnings.

For the fiscal year 2024, Marathon Petroleum reported a net income of $14.6 billion, or $33.81 per diluted share. This compares to a net income of $16.4 billion, or $35.46 per diluted share for the year 2023.

Here's a breakdown of MPC's financial performance metrics:

• Gross Profit: Gross profit is calculated by deducting the cost of goods sold (COGS) from the total revenue. It indicates how efficiently a company manages its production costs.
• Operating Profit: Operating profit is derived by subtracting operating expenses (such as administrative and selling expenses) from the gross profit. This metric reflects the profitability of a company's core business operations.
• Net Profit: Net profit, often referred to as the bottom line, is the profit remaining after all expenses, including taxes and interest, have been deducted from revenue.

Comparing MPC's profitability ratios with industry averages helps to benchmark its performance against its peers. A higher profit margin compared to the industry average suggests that MPC is more efficient or has a competitive advantage.

Operational efficiency plays a crucial role in MPC's profitability. Effective cost management and favorable gross margin trends can significantly impact the bottom line. Monitoring these aspects helps in understanding the company's ability to control expenses and improve profitability.

Factors influencing operational efficiency include:

• Cost Management: Controlling production and operational costs is vital for maintaining and improving profit margins.
• Gross Margin Trends: Monitoring the gross margin trend indicates the company's ability to manage costs relative to revenue.

Here is a table summarizing key financial data for Marathon Petroleum Corporation:

To gain further insights into Marathon Petroleum Corporation and its investors, check out: Exploring Marathon Petroleum Corporation (MPC) Investor Profile: Who’s Buying and Why?

Marathon Petroleum Corporation (MPC) Debt vs. Equity Structure

Marathon Petroleum Corporation (MPC) strategically manages its debt and equity to finance growth and operations. Understanding the specifics of its debt levels, ratios, and financing activities provides key insights into its financial health. Here's a closer look at how MPC structures its debt and equity.

As of December 31, 2023, Marathon Petroleum's financial positioning can be understood through the following metrics:

• Total assets: $78.2 billion
• Total liabilities: $34.7 billion
• Total equity: $43.5 billion

These figures provide a snapshot of MPC's financial structure, highlighting the balance between its assets, liabilities, and equity.

Here's an overview of Marathon Petroleum Corporation's debt levels:

• Long-term debt: As of Q4 2023, Marathon Petroleum had a long-term debt of $21.7 billion.
• Short-term debt: The current portion of long-term debt was reported as $1.2 billion.

The debt-to-equity ratio is a critical metric for evaluating a company's financial leverage. As of December 31, 2023, Marathon Petroleum's debt-to-equity ratio can be calculated as follows:

Debt-to-Equity Ratio = Total Liabilities / Total Equity = $34.7 billion / $43.5 billion ≈ 0.80

A debt-to-equity ratio of approximately 0.80 indicates that MPC uses $0.80 of debt for every $1.00 of equity. Comparing this ratio to industry standards helps contextualize MPC's leverage. The oil and gas industry often requires significant capital investments, which can lead to higher debt levels. However, a ratio of 0.80 suggests a balanced approach to financing, indicating that MPC is not overly reliant on debt.

To provide a clearer picture, here's a summary of MPC's capital structure:

Monitoring credit ratings and refinancing activities are crucial for assessing MPC's financial strategy. In February 2024, MPC executed a cash tender offer to purchase up to $1.25 billion aggregate principal amount of certain outstanding notes. This move aimed to manage its debt portfolio efficiently. Additionally, MPC's credit ratings provide insights into its creditworthiness; for instance, in early 2024, ratings agencies like S&P maintained a positive outlook on MPC, reflecting confidence in its financial stability.

Marathon Petroleum strategically balances debt and equity to fund its operations and growth initiatives. The company’s approach includes:

• Maintaining a balanced debt-to-equity ratio to ensure financial stability.
• Optimizing its capital structure through strategic debt refinancing.
• Using equity to fund significant acquisitions and capital projects.

This balanced approach allows MPC to capitalize on growth opportunities while maintaining a healthy financial profile. For further insights into Marathon Petroleum Corporation's financial health, you can explore: Breaking Down Marathon Petroleum Corporation (MPC) Financial Health: Key Insights for Investors.

Marathon Petroleum Corporation (MPC) Liquidity and Solvency

Analyzing Marathon Petroleum Corporation's financial health involves a detailed look into its liquidity and solvency, providing investors with critical insights into its ability to meet short-term obligations and sustain long-term operations. Liquidity measures a company's capacity to cover its immediate liabilities, while solvency assesses its ability to meet long-term debt obligations.

To assess Marathon Petroleum Corporation's liquidity, we can examine the current and quick ratios. These ratios provide a perspective on whether the company possesses enough liquid assets to cover its short-term liabilities. Here’s a look at these key metrics:

• Current Ratio: A common liquidity ratio, the current ratio, is calculated by dividing current assets by current liabilities.
• Quick Ratio: Also known as the acid-test ratio, the quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. It excludes inventories from current assets, as inventories are not always easily converted into cash.

Working capital, the difference between a company's current assets and current liabilities, is also a critical component of liquidity analysis. Monitoring the trend in working capital provides insights into whether Marathon Petroleum Corporation is efficiently managing its short-term assets and liabilities.

Cash flow statements offer a comprehensive view of Marathon Petroleum Corporation’s liquidity. These statements are divided into three main sections:

• Operating Activities: This section reports the cash generated or used from the company's core business operations.
• Investing Activities: This includes cash flow from the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E).
• Financing Activities: This section details cash flow from debt, equity, and dividends.

A review of these cash flow trends can reveal whether Marathon Petroleum Corporation is generating enough cash from its operations to cover its capital expenditures and debt obligations. For example, it is important to note that Marathon Petroleum Corporation’s cash provided by operations was $3.5 billion in the fourth quarter of 2024. Additionally, capital expenditures totaled $763 million. These figures point to a strong capacity to cover its expenses and invest in future growth.

Here's a table summarizing key financial data for Marathon Petroleum Corporation:

Potential liquidity concerns could arise if Marathon Petroleum Corporation faces challenges in generating sufficient cash flow from operations, experiences a significant increase in short-term debt, or encounters difficulties in managing its working capital effectively. Conversely, strengths in liquidity would be evident if the company maintains healthy cash reserves, demonstrates consistent positive cash flow from operations, and effectively manages its working capital.

For more insights into Marathon Petroleum Corporation, consider reading Exploring Marathon Petroleum Corporation (MPC) Investor Profile: Who’s Buying and Why?

Marathon Petroleum Corporation (MPC) Valuation Analysis

Determining whether Marathon Petroleum Corporation (MPC) is overvalued or undervalued involves analyzing several key financial metrics and market indicators.

These include:

• Price-to-earnings (P/E) ratio
• Price-to-book (P/B) ratio
• Enterprise value-to-EBITDA (EV/EBITDA) ratio
• Stock price trends
• Dividend yield and payout ratios
• Analyst consensus

Let's examine these aspects based on the latest available data.

P/E Ratio: As of April 2025, various sources report different P/E ratios for . One source indicates a P/E ratio of 16.42 as of April 16, 2025. Another source lists the P/E ratio as 12.63 as of April 17, 2025, while yet another source states the P/E ratio is 4.56 as of April 2025. GuruFocus reports the P/E ratio as 12.24 as of April 11, 2025. Nasdaq states a P/E ratio of 4.77 and a forward P/E of 17.54. Given these varying data points, it's essential to consider the source and calculation method. The mean historical P/E ratio over the last ten years is 10.52, with the current ratio being 20% higher than this average.

P/B Ratio: The price-to-book ratio provides insight into how the market values 's assets. As of April 10, 2025, the P/B ratio is reported as 1.58. Another source indicates a P/B ratio of 2.20 as of April 18, 2025. These figures suggest that the stock is trading at a premium relative to its book value.

EV/EBITDA Ratio: The enterprise value-to-EBITDA ratio is another critical valuation metric. Marathon Petroleum's latest twelve months EV/EBITDA is 6.9x. Over the past five years (2020-2024), the EV/EBITDA ratio has averaged 10.9x, peaking at 30.7x in December 2020 and hitting a low of 3.6x in December 2022.

Stock Price Trends: Over the past 12 months, stock has experienced a decrease of 34.53%. As of April 16, 2025, the closing share price was $124.07, which is down 39.14% for the past 12 months. The 52-week high is $215.24, while the 52-week low is $115.10.

Dividend Yield and Payout Ratios: Marathon Petroleum's dividend yield is approximately 2.85% which translates to an annual dividend of $3.64 per share. The payout ratio is 33.5%, indicating that the company retains a significant portion of its earnings for reinvestment and growth.

Analyst Consensus: The consensus rating for stock is 'Moderate Buy'. The average price target from analysts is $161.58, with a high forecast of $183.00 and a low forecast of $135.00. This average price target represents a potential increase of 26.51% from the current price.

In summary, a Mission Statement, Vision, & Core Values of Marathon Petroleum Corporation (MPC). valuation appears mixed. While some metrics suggest it might be fairly valued to undervalued, others indicate it may be trading at a premium. Investors should consider these factors alongside their investment objectives and risk tolerance.

Marathon Petroleum Corporation (MPC) Risk Factors

Marathon Petroleum Corporation (MPC) faces a variety of internal and external risks that could significantly impact its financial health. These risks span several categories, including industry competition, regulatory changes, market conditions, and operational challenges. Understanding these factors is crucial for investors assessing the company's stability and future prospects. Here's a breakdown of key risk areas:

• Industry Competition: MPC operates in a highly competitive industry, facing pressure from both domestic and international refiners. Competitors with greater resources may have a competitive advantage.
• Regulatory Changes: Political or regulatory developments, including changes in governmental policies relating to refined petroleum products, crude oil, natural gas, natural gas liquids (“NGLs”), or renewables, or taxation could impact operations. For example, regulatory changes in California, such as SB X1-2 and AB X2-1, could impact operations and profitability.
• Market Conditions: MPC is exposed to market risks, including significant variations in crude oil and refined product prices, which can affect financial performance. The timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks, or renewables could affect financial performance.

These are the challenges and risks MPC faces:

• Economic and Political Developments
• Commodity Prices and Demand
• Regulatory Compliance

Here's a deeper look into specific risks highlighted in recent reports:

Operational Risks:

• Reliance on Third-Party Transportation: MPC utilizes third-party services to transport crude oil and refined products. Interruptions of supply or increases in costs due to weather events, accidents, labor disputes, governmental regulations, or third-party actions could adversely affect the company.
• Dakota Access Pipeline Disruptions: The Dakota Access Pipeline faces potential operational disruptions due to environmental impact assessments, which could lead to financial obligations for MPLX.
• Industrial incidents and unscheduled shutdowns: These events affecting refineries, machinery, pipelines or transportation can disrupt operations.

Financial Risks:

• Volatility in Commodity Markets: MPC is subject to price volatility mainly in agricultural commodities markets in relation to renewable feedstock used in the production of renewable diesel. To mitigate this risk, MPC uses futures contracts traded on commodity exchanges as hedging instruments.
• Interest Rate Increases: Inflation and interest rate increases could negatively impact financial performance, share price and borrowing costs.
• Counterparty Default: The company uses commodity derivative instruments, which involve risks of counterparty default and regulatory changes.

Strategic Risks:

• Climate Change Litigation: Climate change litigation across various states could result in significant legal liabilities.
• Joint Venture Risks: Joint ventures may be adversely affected by partners' financial conditions or conflicting interests.
• Investments in Sustainable Energy: MPC may need to consider investments in more sustainable energy solutions to diversify its portfolio and mitigate the risks associated with hydrocarbon dependency.

Mitigation Strategies:

• Hedging Strategies: MPC employs hedging strategies using futures contracts to mitigate price volatility in agricultural commodities markets related to renewable feedstock. They also use exchange-traded instruments in commodity markets to minimize market volatility between the time the renewable product is produced and when it is sold.
• Capital Allocation Strategy: MPC aims to maintain a strong capital allocation strategy, including investing in operations and sustaining dividends. In 2024, MPC returned $10.2 billion to shareholders through share repurchases and dividends.
• Focus on Operational Excellence: MPC is focused on safety, reliability, and sustainability, with goals to reduce GHG emissions and improve operational excellence.

Here is a summary of MPC's risk distribution as of Q4 2024:

For additional insights into MPC's strategic priorities and initiatives, refer to Mission Statement, Vision, & Core Values of Marathon Petroleum Corporation (MPC).

Marathon Petroleum Corporation (MPC) Growth Opportunities

Marathon Petroleum Corporation (MPC) is strategically positioned for future growth through several key drivers. These include innovative product development, expansion into new markets, and potential acquisitions that align with their long-term strategic goals. The company's focus on operational excellence and strategic investments are expected to drive revenue and earnings growth.

Analysis of key growth drivers:

• Product Innovations: MPC consistently invests in research and development to enhance its product offerings, focusing on higher-margin products and sustainable solutions.
• Market Expansions: MPC aims to expand its presence in high-growth markets, both domestically and internationally, to capture new customer segments and increase market share.
• Acquisitions: MPC may pursue strategic acquisitions to enhance its asset base, expand its operational footprint, and create synergies that drive efficiencies and profitability.

Future revenue growth projections and earnings estimates will depend on the successful execution of these strategies, as well as macroeconomic factors and industry trends. Analysts' estimates generally reflect a positive outlook, anticipating steady growth driven by increased demand for refined products and strategic initiatives.

Strategic initiatives and partnerships that may drive future growth:

• Renewable Energy Investments: MPC is increasing its investments in renewable energy projects to diversify its portfolio and meet growing demand for sustainable energy solutions.
• Technological Upgrades: Implementing advanced technologies to improve operational efficiency, reduce costs, and enhance safety across its facilities.
• Strategic Partnerships: Collaborating with other industry players and technology providers to leverage expertise and access new markets.

MPC's competitive advantages include its extensive refining capacity, integrated value chain, and strategic geographic locations. These factors enable the company to efficiently process crude oil and distribute refined products, giving it a strong competitive edge. Here's a summary of MPC's financial data:

These financial strengths, combined with strategic growth initiatives, position MPC favorably for sustained growth and value creation in the coming years. For more insights into the company's mission, vision, and core values, visit Mission Statement, Vision, & Core Values of Marathon Petroleum Corporation (MPC).