Source: Streetwise Reports 11/29/2018
Raymond James provided a general outlook on this company post-merger and pre-Investor Day.
In a Nov. 20 research note, analyst Justin Jenkins observed that with the Andeavor acquisition behind it, Marathon Petroleum Corp. (MPC:NYSE) is “uniquely positioned to continue optimizing its now industry-leading refining position while creating even faster growth in the higher-value Midstream and Retail segments.”
Jenkins explained that Marathon should benefit from upside related to merger synergies and “a strengthened refining suite that is well positioned for wide crude differentials and IMO 2020,” referring to the International Maritime Organization’s 0.5% global sulphur cap on marine fuels effective Jan. 1, 2020. Further upside should result from “robust opportunities” in the Speedway and Midstream segments.
At the same time, headwinds, specifically current weak gasoline margins, are expected.
Jenkins relayed what Raymond James expects Marathon to provide on its Investor Day and what it would like Marathon to provide on Investor Day. The former are:
“If new guidance figures and capital allocation outlook are well received, a bounce in shares could be due,” Jenkins asserted.
A detailed explanation of Marathon’s free cash flow profile would be helpful to investors, Jenkins wrote, because the company’s reporting structure is complex and numerous changes have resulted from the Andeavor acquisition.
Raymond James maintains its Strong Buy rating and its $106 per share target price on Marathon, whose share price today is around $65.95.
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Disclosures from Raymond James, Marathon Petroleum Corp., November 20, 2018
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The views expressed in this report accurately reflect the personal views of the analyst(s) covering the subject securities. No part of said person’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. In addition, said analyst has not received compensation from any subject company in the last 12 months.
RAYMOND JAMES RELATIONSHIP DISCLOSURES
Raymond James expects to receive or intends to seek compensation for investment banking services from the subject companies in the next three months.
Raymond James & Associates makes a market in shares of MPC.
Raymond James & Associates received non-investment banking securities-related compensation from MPC within the past 12 months.
( Companies Mentioned: MPC:NYSE,
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