Marathon Petroleum Corporation (MPC) Intrinsic Value & DCF Valuation
Oil & Gas Refining & Marketing · NYSE
Current Price
$263.58
Intrinsic Value
$520.01
+49.3% margin of safety
What Is Marathon Petroleum Corporation's Intrinsic Value?
As of 2026-06-12, our base-case DCF model estimates the intrinsic value of Marathon Petroleum Corporation (MPC) at $520.01 per share, compared with a market price of $263.58, a margin of safety of +49.3%. The base case assumes 20.0% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $398.56 to $659.05. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How our DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Marathon Petroleum Corporation (MPC) Undervalued?
At the current price of $263.58, MPC trades well below our base-case intrinsic value estimate, a margin of safety above 30%. By this model the stock looks undervalued, but verify the growth assumptions match your own view before acting.
COMPETITIVE MOAT
↑Strategic West Coast Refining
MPC's significant West Coast refining capacity, including the region's largest refinery, benefits from persistent fuel supply constraints in California. This positions them to capitalize on regional demand imbalances.
↑Integrated Midstream Operations
Their extensive midstream infrastructure provides logistical advantages and cost efficiencies in transporting crude oil and refined products. This integration enhances their operational flexibility and market access.
↑Scale and Efficiency
As one of the largest refiners, MPC benefits from economies of scale in purchasing, operations, and distribution. This scale allows for greater cost control and competitive pricing.
INVESTMENT RISKS
↓Geopolitical Oil Price Volatility
Collapsing peace talks and geopolitical tensions can lead to significant fluctuations in crude oil prices. This volatility directly impacts MPC's input costs and refined product margins.
↓Regulatory and Environmental Pressures
The refining industry faces ongoing scrutiny regarding environmental regulations and emissions standards. Stricter policies could necessitate costly upgrades and impact operational flexibility.
↓Demand Sensitivity to Economic Cycles
Demand for refined products is closely tied to overall economic activity. Economic downturns or recessions can significantly reduce fuel consumption, impacting MPC's sales volumes and profitability.
Base case
MPC base case valuation
Intrinsic Value
$520.01
Margin of safety
+49.3%
Expected annual return
+14.6%
Base case assumptions: 20.0% annual growth, 10.0% discount rate, 13x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the MPC valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Marathon Petroleum Corporation respond.
Open DCF Calculator for MPCCompany Overview
Marathon Petroleum Corporation (MPC) functions as a prominent integrated energy enterprise, primarily concentrating its downstream operations across the United States. Its business is bifurcated into two main divisions: Refining & Marketing, and Midstream. The Refining & Marketing segment is responsible for processing crude oil and various other raw materials at its refineries, strategically located in the U.S. Gulf Coast, Mid-Continent, and West Coast regions. This division also acquires refined petroleum products and ethanol for subsequent distribution. Key outputs from this segment encompass a diverse array of transportation fuels, including different gasoline blends, heavy fuel oil, and asphalt. Additionally, it manufactures chemicals such as aromatics, propane, propylene, and sulfur. MPC sells these refined goods through multiple channels, including wholesale marketers domestically and globally, purchasers on the open spot market, and independent entrepreneurs who manage primarily Marathon-branded retail locations. It also supplies fuel via long-term agreements to direct dealer sites, predominantly under the ARCO brand. The Midstream segment handles the comprehensive movement, storage, distribution, and commercialization of crude oil and refined products. This is achieved through its extensive network of refining logistics assets, pipelines, terminals, towboats, and barges. Moreover, this segment engages in the collection, processing, and transportation of natural gas, alongside the gathering, transport, fractionation, storage, and marketing of natural gas liquids. By December 31, 2021, the corporation supported 7,159 branded jobber retail points, managed by independent entrepreneurs, spanning 37 U.S. states, the District of Columbia, and Mexico. Marathon Petroleum Corporation, established in 1887, maintains its corporate headquarters in Findlay, Ohio.
Financial Metrics — MPC Stock Valuation Data
Revenue/Share (TTM)
$460.17
FCF/Share (TTM)
$19.33
ROIC (TTM)
8.6%
ROE (TTM)
27.3%
P/FCF
13.5x
EV/EBITDA
8.8x
FCF Yield
7.41%
Debt/Equity
2.05x
Based on trailing twelve-month data, MPC shows a free cash flow per share of $19.33 and a ROIC of 8.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 13.5x and FCF yield of 7.41% are important context metrics when evaluating MPC's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of MPC?
Marathon Petroleum Corporation currently generates $19.33 in free cash flow per share. At the current price of $263.58, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is MPC undervalued?
MPC trades at a P/FCF ratio of 13.5x with a free cash flow yield of 7.41%. This relatively low P/FCF may suggest the stock is attractively priced relative to its cash generation. However, whether MPC is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value MPC stock using DCF?
To perform a DCF valuation on Marathon Petroleum Corporation: (1) Start with the trailing free cash flow per share ($19.33) 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 — with a debt-to-equity of 2.05x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to MPC?
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 company will produce over the next 5-10 years, shaped by Oil & Gas Refining & Marketing trends, then discounting those amounts to today's dollars. MPC's ROIC of 8.6% shows moderate capital returns.
How does WACC affect MPC stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For MPC, with a debt-to-equity ratio of 2.05x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 8.8x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See MPC PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Energy valuationsDCF and P/E value MPC with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.