Is Marathon Petroleum Corp (MPC) overvalued?
On Equity Rank's model estimate, MPC trades 13% below its fair value. Marathon Petroleum Corp (MPC) last closed at $372.74; the multi-method model fair value is $429.27.
| Price | Model fair value | Price vs model |
|---|---|---|
| $372.74 | $429.27 | 13% below |
What the answer rests on
- 7 of 11 valuation methods put MPC's value above its price and 4 put it below, so the methods disagree.
- To justify today's price, MPC's free cash flow would need to grow about 2.9% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -30.1% a year.
- MPC trades at 7.8 times its last year's earnings, against a median of 14.9 for 110 profitable Energy companies.
- Over the past year the price sat below the model fair value on 58% of trading days. The gap ranged from 18% below to 36% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind MPC's fair value · What prices assume · Other companies