Marathon Petroleum (NYSE:MPC) began Wednesday on the upside, on word Goldman Sachs had updated the stock to buy from neutral
Marathon Petroleum was previously its top pick within the refining oil segment from 2018 to 2022, but was “prematurely” downgraded to neutral, Goldman said. Analyst Neil Mehta upgraded the stock again, saying that he still sees momentum for the stock’s return of capital and execution.
“We highlight the return of capital for MPC is substantial, where we raise our buyback forecasts. … Ultimately, we believe MPC deserves a premium multiple given these factors,” Mehta said.
Marathon Petroleum was downgraded Tuesday at J.P. Morgan to Neutral from Overweight with a $149 price target on valuation, as the stock has been the top performer among oil refiners since the start of the pandemic, driven by a combination of solid execution and the well-executed Speedway sale.
JPM analyst John Royall believes Marathon Petroleum is executing well and has continued potential to aggressively return capital even in a refining downturn, but he sees slightly below-average upside potential relative to the group average.
With a $10-Billion cash balance buffer that can be utilized for share buybacks in excess of free cash flow, Marathon should be able to aggressively return capital to shareholders in the medium term.
MPC shares zoomed $2.36, or 1.8%, to commence trading Wednesday at $133.93.