Value
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.2 |
| P/S | 10.0 |
| EV/EBITDA | 5.1 |
| Fwd P/E | 9.1 |
| PEG | 5.7 |
| Analyst target | 4.0 |
- ▸Forward P/E: 11.1x
- ▸PEG: 1.31
MPC · Why this verdict
Why Marathon Petroleum (MPC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company relies entirely on third-party suppliers for crude oil feedstocks without any upstream production of its own — a high-concentration supplier risk identified in filings — leaving refining margins directly exposed to input-cost spikes with no natural hedge. Bear case | EPS actual remains above $3.00 for 4 consecutive quarters despite crude price volatility, demonstrating that the concentration risk has not impaired earnings. | →Stable |
| CounterRefining complexity and the ability to blend multiple crude grades across a large network can partially offset point-in-time input-cost pressure, and the attractive valuation already embeds some market discount for the lack of upstream integration. | ||
At a forward price-to-earnings of roughly 10x and a PEG ratio near 1.0x, the stock screens as attractively valued while generating a return on equity of 27% — a combination that is unusual in the refining sector and implies meaningful earnings power per dollar of equity capital. Valuation breakdown | Return on equity stays above 20% and the forward P/E remains below 13x for 2 consecutive quarters, confirming that the value-plus-return pairing holds. | →Stable |
| CounterNo discernible competitive moat is noted in the quality assessment, meaning the low multiple may reflect a structural discount rather than transient undervaluation. The D/E ratio carries a balance-sheet penalty, so a portion of the 27% return on equity may reflect leverage amplification rather than pure operational superiority. | ||
The company has beaten earnings estimates in 3 of the last 4 quarters, with an average positive surprise of roughly 47% — the most recent beat saw actual earnings more than double the estimate — demonstrating an ability to outperform conservative analyst models even in a volatile commodity environment. Earnings | EPS beats in at least 3 of the next 4 quarters, with the average quarterly surprise remaining above 10%. | →Stable |
| CounterOne of the four most recent quarters produced a miss against an estimate of $3.16 — a modest hurdle. If refining margins compress or crude input costs spike, the buffer between estimates and actuals could narrow sharply and end the beat pattern. | ||
On-balance volume is falling and price momentum is below the threshold for a constructive technical setup, indicating that sellers are controlling price action even as the stock remains above its long-term moving average — a pattern consistent with distribution near a resistance level. Momentum breakdown | Momentum score rises above 4.5 for 2 consecutive months, confirming that buying interest has re-emerged. | →Stable |
| CounterThe stock is still trading above the 200-day moving average, meaning the longer-term uptrend has not been broken. A positive catalyst — such as a refining-margin uptick or capital-return announcement — could quickly re-engage buyers and end the distribution phase. | ||
The company relies entirely on third-party suppliers for crude oil feedstocks without any upstream production of its own — a high-concentration supplier risk identified in filings — leaving refining margins directly exposed to input-cost spikes with no natural hedge.
→StableBear case
- Expectation
- EPS actual remains above $3.00 for 4 consecutive quarters despite crude price volatility, demonstrating that the concentration risk has not impaired earnings.
CounterRefining complexity and the ability to blend multiple crude grades across a large network can partially offset point-in-time input-cost pressure, and the attractive valuation already embeds some market discount for the lack of upstream integration.
At a forward price-to-earnings of roughly 10x and a PEG ratio near 1.0x, the stock screens as attractively valued while generating a return on equity of 27% — a combination that is unusual in the refining sector and implies meaningful earnings power per dollar of equity capital.
→StableValuation breakdown
- Expectation
- Return on equity stays above 20% and the forward P/E remains below 13x for 2 consecutive quarters, confirming that the value-plus-return pairing holds.
CounterNo discernible competitive moat is noted in the quality assessment, meaning the low multiple may reflect a structural discount rather than transient undervaluation. The D/E ratio carries a balance-sheet penalty, so a portion of the 27% return on equity may reflect leverage amplification rather than pure operational superiority.
The company has beaten earnings estimates in 3 of the last 4 quarters, with an average positive surprise of roughly 47% — the most recent beat saw actual earnings more than double the estimate — demonstrating an ability to outperform conservative analyst models even in a volatile commodity environment.
→StableEarnings
- Expectation
- EPS beats in at least 3 of the next 4 quarters, with the average quarterly surprise remaining above 10%.
CounterOne of the four most recent quarters produced a miss against an estimate of $3.16 — a modest hurdle. If refining margins compress or crude input costs spike, the buffer between estimates and actuals could narrow sharply and end the beat pattern.
On-balance volume is falling and price momentum is below the threshold for a constructive technical setup, indicating that sellers are controlling price action even as the stock remains above its long-term moving average — a pattern consistent with distribution near a resistance level.
→StableMomentum breakdown
- Expectation
- Momentum score rises above 4.5 for 2 consecutive months, confirming that buying interest has re-emerged.
CounterThe stock is still trading above the 200-day moving average, meaning the longer-term uptrend has not been broken. A positive catalyst — such as a refining-margin uptick or capital-return announcement — could quickly re-engage buyers and end the distribution phase.
TrendMatrix Research · core thesis
Engine thesis — one sentence
The stock offers an attractively priced entry into a high-return-on-equity refining franchise with a recent earnings beat record, but the reward-to-risk ratio is currently unfavorable given that roughly 6.4% of headroom remains to the resistance target, momentum is deteriorating with volume distribution, and the business carries crude-feedstock concentration risk that leaves margins exposed to input-cost volatility without an upstream buffer.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 9.2 |
| ROA | 3.4 |
| Gross margin | 0.0 |
| Op margin | 1.4 |
| Net margin | 1.7 |
| Current ratio | 4.5 |
| FCF quality | 5.7 |
| Moat | 5.4 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 27%
- ▸Earnings quality warning: 76% FCF/NI
- ▸No competitive moat
Growth
4.7/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 4.7 |
Momentum
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.2 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 7.4 |
| Price target | 5.3 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $1,953,272 (0.003% of mkt cap)
Peer rank
4.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.7 |
| quality rank | 7.7 |
| growth rank | 4.4 |
- ▸Superior ROE vs peers
Technical
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.8 |
| support resistance | 1.5 |
| 52w position | 9.6 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.5 |
| days to cover | 7.4 |
| volatility | 5.0 |
| put call | 10.0 |
| implied vol | 4.8 |
| beta | 9.9 |
| debt equity | 4.1 |
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 147.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:7.1>=5.5
- INSIDER:OK
- EARNINGS_PROXIMITY:31d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.8=NEGATIVE
Warning (1)
- 8K_FLAG:1.02
Reward-to-Risk
-0.79
Upside
-8.3%
Downside
10.5%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 55, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.8=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.79 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 7.1, Risk (lower is worse) at 7.1, and Value at 6.7; the weakest are Quality at 4.2, Technical at 4.3, and Peer rank at 4.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.79 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Low Multiple With Strong Roe
Trip ifReturn on equity falls below 15% for 2 consecutive quarters.
- P2Earnings Beat Consistency
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3Crude Feedstock Concentration Risk
Trip ifEPS actual remains above $3.00 for 4 consecutive quarters, proving that feedstock concentration has not impaired earnings.
- P4Deteriorating Momentum Distribution
Trip ifMomentum score rises above 4.5 for 2 consecutive months.