Oil & Gas Refining & Marketing · NYSE
Current Price
$241.81
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Marathon Petroleum Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Marathon Petroleum Corporation, together with its subsidiaries, operates as an integrated downstream energy company primarily in the United States. It operates in two segments, Refining & Marketing, and Midstream. The Refining & Marketing segment refines crude oil and other feedstocks at its refineries in the Gulf Coast, Mid-Continent, and West Coast regions of the United States; and purchases refined products and ethanol for resale. Its refined products include transportation fuels, such as reformulated gasolines and blend-grade gasolines; heavy fuel oil; and asphalt. This segment also manufactures aromatics, propane, propylene, and sulfur. It sells refined products to wholesale marketing customers in the United States and internationally, buyers on the spot market, and independent entrepreneurs who operate primarily Marathon branded outlets, as well as through long-term fuel supply contracts to direct dealer locations primarily under the ARCO brand. The Midstream segment transports, stores, distributes, and markets crude oil and refined products through refining logistics assets, pipelines, terminals, towboats, and barges; gathers, processes, and transports natural gas; and gathers, transports, fractionates, stores, and markets natural gas liquids. As of December 31, 2021, the company operated 7,159 brand jobber outlets in 37 states, the District of Columbia, and Mexico through independent entrepreneurs. Marathon Petroleum Corporation was founded in 1887 and is headquartered in Findlay, Ohio.
ROIC (TTM)
7.0%
ROE (TTM)
24.0%
FCF Yield
6.69%
Based on trailing twelve-month data, MPC shows a free cash flow per share of N/A and a ROIC of 7.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 6.69% are important context metrics when evaluating MPC's stock valuation relative to peers.
The intrinsic value of MPC depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether MPC is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $241.81. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Marathon Petroleum Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Refining & Marketing industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting MPC's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Marathon Petroleum Corporation, this means projecting how much free cash flow the Oil & Gas Refining & Marketing will produce over the next 5-10 years, then discounting those amounts to today's dollars. MPC's ROIC of 7.0% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For MPC, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
