Is MPLX LP (MPLX) overvalued?
On Equity Rank's model estimate, MPLX trades 56% above its fair value. MPLX LP (MPLX) last closed at $55.91; the multi-method model fair value is $35.82.
| Price | Model fair value | Price vs model |
|---|---|---|
| $55.91 | $35.82 | 56% above |
What the answer rests on
- 4 of 10 valuation methods put MPLX's value above its price and 6 put it below, so the methods disagree.
- To justify today's price, MPLX's free cash flow would need to grow about -2.6% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -0.9% a year.
- MPLX trades at 13.1 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 0% of trading days. The gap ranged from 7% above to 69% 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 MPLX's fair value · What prices assume · Other companies