Marathon Petroleum raised to Buy at Mizuho on stronger refining outlook
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Marathon Petroleum (NYSE:MPC) is upgraded to Buy from Neutral with a $160 price target, raised from $133, at Mizuho as part of the firm's improved outlook on refining (CRAK) given low product inventories and recovering demand.
In addition to strong Q4 results, Mizuho's Nitin Kumar said Marathon (MPC) management underscored its commitment to shareholder returns by announcing an incremental $5B share buyback authorization, bringing the total remaining authorization to ~$7.6B.
Kumar and his team anticipate further cash flow growth through the expansion of opportunities in renewable diesel and the competitiveness of the Martinez renewable diesel project in California; with pre-treatment capabilities expected to come online in H2 2023, the facility is expected to expand production capacity to 730M gal/year by the end of 2023.
Among other refiners, Kumar also raised his price target for Valero Energy (VLO) to $170 from $157.
The firm's top picks among oil and gas producers are Exxon Mobil (XOM), Diamondback Energy (FANG) and Coterra Energy (CTRA).
Marathon Petroleum (MPC) also was awarded a Buy rating at UBS, noting the company paid out $19.3B to shareholders during the past two years, the highest among independent refiners.