UBS raised its price target on Marathon Petroleum Corporation from $321 to $450 on September 8 while reaffirming its Buy rating, implying further upside of over 14% from current levels and a target well beyond the stock's record high of just below $407 per share. The bullish call rests on continued strength in global refining margins, which UBS expects to stay higher for longer than anticipated, supported by the refiner's strong operational performance, disciplined spending, favorable West Coast market conditions, and high shareholder returns. Marathon, the largest refiner by volume in the United States, doubled its refining margins in the second quarter, helping drive an almost four-fold increase in profits, and returned $2.8 billion to shareholders during the quarter, up from $1 billion a year earlier. TD Cowen's Jason Gabelman expects Marathon to repurchase about 20% of its market value between the third quarter and the end of next year. Risks remain, as the windfall stemmed from extraordinary market conditions and even a modest decline in refining margins could trigger a significant pullback, while refineries ran at about 94% of capacity in the second quarter and Gulf Coast refineries at 100% utilization, raising the risk of equipment failures and unplanned outages.
Marathon Petroleum CorpUBS raised its price target on Marathon Petroleum to $450 and reaffirmed its Buy rating, citing stronger-for-longer refining margins.
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