Marathon Petroleum Corporation (MPC) shares are flying high on Wednesday, fueled by a strong third-quarter earnings report that exceeded analysts’ expectations. The company reported revenue of $35.4 billion, surpassing estimates, with adjusted earnings per share (EPS) reaching $1.87, significantly higher than the anticipated $0.98.
Scotiabank analyst Paul Y. Cheng, who holds a Sector Outperform rating and a $170 price target for MPC, is optimistic about the near-term prospects for the stock. Cheng attributes the positive outlook to the company’s robust refining operations, which performed exceptionally well during the quarter.
Key factors driving the strong performance include higher-than-expected throughput, unit cost, and margin capture. Cheng notes that the efficient turnaround execution and robust commercial operations were crucial contributors to the positive results. This marks the second consecutive quarter of better-than-expected margin capture, a trend that could further propel the stock’s momentum, according to the analyst.
However, Cheng cautions that the fourth-quarter outlook is less bullish than anticipated. The company’s throughput outlook is below previous estimates, with the Mid-Con region expected to underperform.
Despite the subdued fourth-quarter outlook, investors seeking exposure to Marathon Petroleum can consider ETFs such as the iShares U.S. Oil & Gas Exploration & Production ETF (IEO) and the VanEck Oil Refiners ETF (CRAK).
MPC shares closed the day up 3.49% at $154.78, demonstrating investor confidence in the company’s performance and future potential.
