Marathon Petroleum Stock Just Hit New Highs, But Oil Price Risks Remain

• Marathon Petroleum (MPC) exhibits strong technical momentum, recently hitting a new all-time high.
• Shares are up more than 120% over the past year.
• MPC maintains a 100% “Buy” technical opinion from Barchart.
• Future performance is highly sensitive to refining margins and oil prices, with downside risk if oil drops to $75 per barrel.

Today’s Featured Stock

Valued at $116 billion, Marathon Petroleum (MPC) is a leading independent refiner, transporter, and marketer of petroleum products. The company came into existence following the spinoff from Marathon Oil Corporation’s refining and sales business into a separate, independent and publicly traded entity. Marathon Oil completed the acquisition of its rival Andeavor. Marathon Petroleum operates in two segments: refining and marketing and pipeline transportation. 

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals and superior current momentum. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. MPC checks those boxes. The Trend Seeker issued a new “Buy” signal on July 6. The stock gained 49.77% since that signal.

Barchart’s Technical Indicators for Marathon Petroleum

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Marathon Petroleum scored an all-time high of $409.50 on September 14.

• Marathon has a Weighted Alpha of 144.45.
• MPC has a 100% “Buy” opinion from Barchart.
• The stock has gained 122.34% over the past 52 weeks.
• Marathon has its Trend Seeker “Buy” signal intact.
• The stock recently traded at $403.53 with a 50-day moving average of $338.31.
• MPC had 13 highs and gained 12.57% in the last month.
• 60-month beta of 0.53.
• Relative Strength Index (RSI) is at 77.22.
• There’s a technical support level around $386.57.

Don’t Forget the Fundamentals

• $116 billion market capitalization.
• 14.96x trailing price-earnings ratio.
• 0.99% dividend yield.
• Revenue is projected to grow 23.92% this year and be down 12.70% next year.
• Earnings are estimated to increase by 396.05% this year but decrease by 30.26% next year.

Analyst and Investor Sentiment on Marathon Petroleum

• The Wall Street analysts followed by Barchart give the stock 9 “Strong Buy,” 3 “Moderate Buy,” and 7 “Hold” opinions with price targets from $265 to $462.
• Value Line rates the stock “Highest” with price targets of $285 to $575.
• Morningstar thinks the stock is 67% overvalued with a fair value of $236.
• CFRA’s MarketScope rates the stock as “Buy” with a price target of $392.
• 59,790 investors are following the stock on Seeking Alpha, which rates it a “Strong Buy.”
• TipRanks’ analysts’ price targets are between $290 and $462 with a consensus of $368.
• Short interest is 2.60% of the float with 3.03 days to cover the float.

The Bottom Line on Marathon Petroleum

Marathon, along with all other petroleum companies, will make money as long as margins stay high. If the price of oil drops back to the $75-a-barrel range, you will see the price momentum reverse.

Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculate should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.

On the date of publication, Jim Van Meerten did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.