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Abhoy Sarkar's Avatar
published in Blogs
Sep 25, 2019

Marathon Petroleum (MPC, $60.07) should be split into 3, says Elliot Management

Marathon Petroleum shares surged Wednesday, following comments from activist investors at Elliott Management that the group should be split into three separate companies. 

The independent oil refining company’s 2.5% stake is held by Elliott. Elliot has suggested that Marathon should initiate a separation into three independent entities,  in order to unlock more than $22 billion in value for shareholders. Elliot also believes that the separation would  boost the company's stock price by more than 60%.

Elliott’s letter asked Marathon to separate its Speedway gas-station chain and its pipeline business into their own companies, while making Marathon’s refining business as the new Marathon.

Marathon agreed to a $23 billion deal last year to acquire rival Andeavor. But Elliot does not approve of the purchase since it believes that Marathon sought another integrated oil refining company at a time when it promised to consider simplifying its business structure.

Back in 2016, when Elliott had first targeted Marathon, the former had insisted on a similar breakup of the company. Eventually it settled on a promise from Marathon to simplify its midstream business and review its Speedway chain of company-owned retail gasoline stores.

 

 

Related Ticker: MPC

MPC's MACD Histogram just turned positive

The Moving Average Convergence Divergence (MACD) for MPC turned positive on May 18, 2023. Looking at past instances where MPC's MACD turned positive, the stock continued to rise in of 42 cases over the following month. The odds of a continued upward trend are .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where MPC's RSI Indicator exited the oversold zone, of 25 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .

The Momentum Indicator moved above the 0 level on June 07, 2023. You may want to consider a long position or call options on MPC as a result. In of 81 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where MPC advanced for three days, in of 313 cases, the price rose further within the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

The Stochastic Oscillator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where MPC declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

MPC broke above its upper Bollinger Band on June 07, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

The Aroon Indicator for MPC entered a downward trend on May 15, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 74, placing this stock better than average.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.803) is normal, around the industry mean (6.629). P/E Ratio (3.503) is within average values for comparable stocks, (14.334). Projected Growth (PEG Ratio) (0.185) is also within normal values, averaging (2.925). Dividend Yield (0.025) settles around the average of (0.054) among similar stocks. P/S Ratio (0.318) is also within normal values, averaging (0.630).

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. MPC’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

Notable companies

The most notable companies in this group are MARATHON PETROLEUM Corp (NYSE:MPC), Phillips 66 (NYSE:PSX), Valero Energy Corp (NYSE:VLO).

Industry description

The Oil Refining/Marketing segment includes companies that refine crude oil into a number of petroleum products, including gasoline, jet fuel and diesel, and then sell the usable products to the end users. These companies are involved in what’s called downstream operations in the oil business. They also engage in the marketing and distribution of crude oil and natural gas products. In other words, the downstream oil and gas business is focused on post-production processes of crude oil and natural gas. When oil prices slump, downstream businesses are hurt less or in some cases even benefit, since their purchase cost of crude oil goes down. Some of the biggest U.S. oil refining/marketing companies include Phillips 66, Marathon Petroleum Corporation and Valero Energy Corp.

Market Cap

The average market capitalization across the Oil Refining/Marketing Industry is 5.84B. The market cap for tickers in the group ranges from 107.69K to 46.26B. MPC holds the highest valuation in this group at 46.26B. The lowest valued company is AMCF at 107.69K.

High and low price notable news

The average weekly price growth across all stocks in the Oil Refining/Marketing Industry was 3%. For the same Industry, the average monthly price growth was 5%, and the average quarterly price growth was 8%. OILRF experienced the highest price growth at 30%, while TOIPF experienced the biggest fall at -13%.

Volume

The average weekly volume growth across all stocks in the Oil Refining/Marketing Industry was -51%. For the same stocks of the Industry, the average monthly volume growth was -60% and the average quarterly volume growth was -48%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 50
P/E Growth Rating: 60
Price Growth Rating: 50
SMR Rating: 45
Profit Risk Rating: 74
Seasonality Score: 0 (-100 ... +100)
View a ticker or compare two or three
Technical Analysis# Of IndicatorsAvg. Odds
   
   
Show details...
A.I.Advisor
published price charts
A.I. Advisor
published General Information

General Information

an operator of petroleum product refiners, marketers and transporters

Industry OilRefiningMarketing

Profile
Fundamentals
Details
Industry
Oil Refining Or Marketing
Address
539 South Main Street
Phone
+1 419 422-2121
Employees
17800
Web
https://www.marathonpetroleum.com
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MPC and

Correlation & Price change

A.I.dvisor indicates that over the last year, MPC has been closely correlated with VLO. These tickers have moved in lockstep 90% of the time. This A.I.-generated data suggests there is a high statistical probability that if MPC jumps, then VLO could also see price increases.

1D
1W
1M
1Q
6M
1Y
5Y
Ticker /
NAME
Correlation
To MPC
1D Price
Change %
MPC100%
-1.49%
VLO - MPC
90%
Closely correlated
-0.93%
PSX - MPC
85%
Closely correlated
-1.89%
DINO - MPC
83%
Closely correlated
-0.48%
PBF - MPC
83%
Closely correlated
+1.13%
CVI - MPC
82%
Closely correlated
-0.47%
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