Core Insights - Marathon Petroleum Corporation (NYSE:MPC) experienced a significant share price increase of 15.46% from February 2 to February 9, 2026, marking it as one of the top-performing energy stocks during that week [1]. Company Performance - Marathon Petroleum is recognized as a leading integrated downstream energy company, operating the largest refining system in the United States [2]. - The company reported strong Q4 2025 results on February 3, with adjusted earnings of $4.07 per share, surpassing forecasts by $1.36. Revenue for the quarter reached $33.42 billion, exceeding estimates by nearly $3 billion [3]. - The refining margin for Q4 was reported at $18.65 per barrel, reflecting a year-over-year increase of over 44%. This surge contributed to refining and marketing earnings of approximately $2 billion, a significant rise from $559 million the previous year [4]. - During Q4, Marathon operated its refineries at about 95% capacity, achieving a total throughput of just over 3 million barrels per day. Notably, both the Garyville refinery in Louisiana and the Robinson refinery in Illinois set monthly crude throughput records [4]. Analyst Ratings - On February 4, TD Cowen analyst Jason Gabelman raised the price target for Marathon Petroleum from $183 to $198 while maintaining a 'Buy' rating. Other analysts from Citi, UBS, and Wells Fargo also increased their price targets following the company's strong Q4 performance [5].

Core Viewpoint - The Zacks Oil and Gas - Refining & Marketing industry faces significant challenges due to margin volatility and rising operational costs, yet it has outperformed the broader energy sector and S&P 500 over the past year, presenting selective investment opportunities in companies like Phillips 66, Marathon Petroleum, and Valero Energy [1][10]. Industry Overview - The industry includes companies that refine petroleum products and non-energy materials, with profitability heavily influenced by refining margins, inventory levels, and demand patterns [2]. - Refining margins are volatile and affected by various factors including crude prices, product demand, and regional capacity utilization [2]. Trends Defining the Industry's Future - Margin volatility and demand uncertainty are persistent risks, with crack spreads subject to rapid changes due to external factors like weather and refinery operations [3]. - Operational flexibility and strong export linkages are crucial for managing volatility, allowing refiners to optimize yields and respond to market demands effectively [4]. - Rising costs and regulatory pressures pose challenges, with maintenance and compliance expenses increasing, which can compress margins and create operational risks [5]. Industry Rank and Outlook - The industry currently holds a Zacks Industry Rank of 197, placing it in the bottom 19% of 243 Zacks industries, indicating a bearish outlook [7]. - Analysts have revised earnings estimates downward, with a 17.5% decrease in the industry's earnings estimate for 2026 over the past year [8]. Performance Metrics - The industry has increased by 24.7% over the past year, outperforming the broader energy sector's 17% increase and the S&P 500's 16.8% gain [10]. - The current EV/EBITDA ratio for the industry is 5.05X, significantly lower than the S&P 500's 17.20X and the sector's 6.07X [13]. Company Highlights - **Phillips 66**: A major independent refiner with a refining capacity of nearly 2 million barrels per day, expected EPS growth rate of 25%, and shares have gained 21.6% in a year [16][17]. - **Marathon Petroleum**: A significant independent refiner with access to lower-cost crude, expected EPS growth of 18.8%, and shares have increased by 31.5% in a year [19][20]. - **Valero Energy**: Operates 15 refineries with a throughput of about 3.2 million barrels per day, expected EPS growth of 15.7%, and shares have risen by 47.1% in a year [21][22].

Group 1 - TD Cowen analyst Jason Gabelman raised the price target on Marathon Petroleum (MPC) to $198 from $183 while maintaining a Buy rating on the shares [1] - The firm's updated model reflects earnings that exceeded expectations due to refining gross margin aligning with historical capture [1] - First quarter 2026 throughput and operating expenses will be affected by turnarounds, but operations are expected to improve thereafter with lower year-over-year turnaround spending and future declines [1] Group 2 - Margins are anticipated to benefit from seasonality [1]

Core Insights - Marathon Petroleum Corporation (MPC) reported fourth-quarter adjusted earnings per share of $4.07, significantly exceeding the Zacks Consensus Estimate of $2.73 and up from the year-ago adjusted profit of 77 cents, driven by strong performance in the Refining & Marketing segment and a 4.9% year-over-year decline in costs and expenses [1][2] Financial Performance - The company reported revenues of $33.4 billion, surpassing the Zacks Consensus Estimate of $29.6 billion, although this represented a slight decline of 0.1% year-over-year due to lower sales and reduced income from equity-method investments [2] - MPC distributed approximately $1.3 billion to shareholders in the fourth quarter and had $4.4 billion remaining under its share repurchase authorizations as of December 31, 2025 [3] Segment Analysis - The Refining & Marketing segment achieved an adjusted EBITDA of $2 billion, a 75.8% increase from the previous year's $1.1 billion, exceeding the consensus estimate by 26.7% [4] - The refining margin improved to $18.65 per barrel from $12.93 in the prior-year quarter, reflecting stronger crack spreads and beating the consensus estimate by 6.5% [5] - Refining capacity utilization was reported at 95%, up from 94% in the year-ago period [5] - The Midstream segment's adjusted EBITDA remained flat year-over-year at $1.7 billion, missing the consensus estimate by 3.7% due to higher operating costs and divestitures [7] Expense and Capital Expenditure - Total expenses for the fourth quarter were $30.7 billion, down from $32.3 billion in the previous year [8] - Capital expenditures for the quarter totaled $1.5 billion, with 31% allocated to Refining & Marketing and 67% to the Midstream segment [8] Future Guidance - MPC expects refining operating costs to average approximately $5.85 per barrel in the first quarter of 2026, with total refinery throughputs projected at about 2,740 thousand barrels per day [10] - Planned refining turnaround expenses for 2026 are expected to total approximately $1.35 billion, indicating a decline from 2025 levels [12] - The company anticipates that distributions from MPLX will fully fund MPC's dividends and standalone capital spending in 2026, with plans to return excess free cash flow to shareholders [15]

Group 1 - Oil prices have risen for the second consecutive day due to geopolitical tensions following the U.S. downing of an Iranian drone near an aircraft carrier, with WTI crude approaching $64 per barrel and Brent crude above $67 per barrel [1] - The American Petroleum Institute reported a decrease of 11.1 million barrels in U.S. crude oil inventories last week, which, if confirmed by official data, would mark the largest weekly decline since June [4] - Concerns about potential conflicts in the Middle East, a region that accounts for about one-third of global oil production, have contributed to rising oil prices despite signs of oversupply [4] Group 2 - The energy sector in the U.S. stock market has also seen gains, with the S&P Energy sector rising by 3.24%, and notable increases in companies such as Valero Energy (VLO.US) and Marathon Oil (MPC.US) by 6% [5] - ExxonMobil (XOM.US) and Occidental Petroleum (OXY.US) saw increases of over 3%, while Chevron (CVX.US) and Devon Energy (DVN.US) rose by 2% [5] Group 3 - The geopolitical situation is further complicated by incidents such as the harassment of a U.S.-flagged tanker by Iranian vessels in the Strait of Hormuz, a critical trade route for oil and liquefied natural gas [4] - OPEC+ is expected to see a gradual increase in global oil demand starting from March or April, which may help balance market supply and demand [4]

Group 1 - The article does not contain any relevant content regarding company or industry insights [1]

Group 1 - Marathon Petroleum purchased two cargoes of Venezuelan crude oil at the end of January [1] - The company expects its refineries to process more heavy grades of crude oil [1]

Financial Data and Key Metrics Changes - For the full year 2025, the company achieved adjusted earnings per share of $10.70 and adjusted EBITDA of approximately $12 billion, with a cash flow from operations of $8.7 billion [13][5] - The fourth quarter adjusted earnings per share was reported at $4.07, with adjusted EBITDA around $3.5 billion [13][5] - The refining and marketing segment adjusted EBITDA per barrel was $5.63 for the year and $7.15 for the fourth quarter [13][5] Business Line Data and Key Metrics Changes - The midstream segment grew adjusted EBITDA year-over-year, reaching nearly $7 billion, while the refining and marketing segment's fourth quarter adjusted EBITDA was $2 billion [5][14] - Refining utilization was reported at 95% for the fourth quarter, with total throughput exceeding 3 million barrels per day [14][15] - The renewable segment achieved 94% utilization, benefiting from a one-time sale of credits [17] Market Data and Key Metrics Changes - Global consumption trends for refined products remained steady, with gasoline and distillates each growing by approximately 1% and jet fuel demand increasing nearly 4% [6] - The global refining system is expected to remain tight, with limited new capacity coming online in 2026, further tightening U.S. markets due to regional closures [6] Company Strategy and Development Direction - The company plans to invest approximately $700 million in refining value-enhancing capital in 2026, focusing on lowering operating costs and enhancing system reliability [7] - Investments in marketing are set at $250 million to expand the reach of branded stations in targeted markets, supporting long-term secured offtake [8] - The company aims for a disciplined capital strategy, targeting returns of 25% or above on capital deployment [10] Management's Comments on Operating Environment and Future Outlook - Management remains constructive on refined product demand, expecting growth to outpace capacity additions through the end of the decade [6] - The company anticipates that the structural demand growth across refined products will continue, supported by a strong midstream business outlook [10] - Management expressed confidence in the long-term fundamentals of the energy markets, particularly in the context of MPLX's growth and distribution [12][20] Other Important Information - The company returned $4.5 billion to shareholders in 2025, including a 6.5% reduction in shares outstanding [13] - The company has a net debt to capital ratio within the range of 25%-30% and targets an annual cash balance of $1 billion [18] Q&A Session Summary Question: Capture Rate Performance - The capture rate was strong at 114%, attributed to optimization through the commercial team and improved structural capabilities [25][26] Question: Return of Capital Expectations - The company expects to match or exceed the $4.5 billion returned to shareholders in 2026 based on current market conditions [31][32] Question: Venezuelan Crude Absorption - The company views access to Venezuelan crude positively, with capabilities to absorb incremental barrels, enhancing its competitive position [35][36] Question: Refining Utilization Sensitivity - The company can adjust refining operations to optimize margins based on market conditions, demonstrating flexibility in its operations [50][51] Question: CapEx Guidance - The company expects a 20% reduction in refining capital expenditures in 2026, with further reductions anticipated in 2027 and 2028 [53][56] Question: Negotiations with USW - Ongoing negotiations with the United Steelworkers are progressing positively, with rolling extensions in place [64][65]

Financial Data and Key Metrics Changes - For the full year 2025, the company achieved adjusted earnings per share of $10.70 and adjusted EBITDA of approximately $12 billion, with a fourth quarter adjusted earnings per share of $4.07 and adjusted EBITDA of about $3.5 billion [13][14] - The company generated $8.3 billion in cash from operations and returned $4.5 billion to shareholders through share repurchases and dividends, reflecting a 6.5% reduction in shares outstanding [5][13] Business Line Data and Key Metrics Changes - The refining and marketing segment reported adjusted EBITDA of $2 billion for the fourth quarter, with refineries running at 95% utilization and total throughput just over 3 million barrels per day [14][15] - The midstream segment's adjusted EBITDA grew year-over-year, reaching a record of nearly $7 billion, although fourth quarter results declined due to divestitures of non-core assets [5][11][17] Market Data and Key Metrics Changes - Global refined product demand is expected to continue growing, with gasoline and distillates each increasing by roughly 1% and jet fuel demand rising nearly 4% [6] - The global refining system is anticipated to remain tight, with limited new capacity coming online in 2026, further tightening U.S. markets due to regional closures [6][10] Company Strategy and Development Direction - The company plans to invest approximately $700 million in refining value-enhancing capital in 2026, focusing on lowering operating costs and enhancing system reliability [7][10] - Investments in marketing will total $250 million to expand the reach of branded stations in targeted markets, supporting long-term secured offtake and enhancing performance [8] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about refined product demand and expects growth to outpace the net effect of capacity additions through the end of the decade [6][10] - The company emphasizes a disciplined capital strategy and aims for returns of 25% or above on capital investments, reflecting confidence in long-term opportunities across the energy space [10][12] Other Important Information - The company achieved its strongest process safety performance in the last four years and the lowest OSHA recordable injury rate, reflecting a commitment to safe and environmentally sound operations [5] - MPLX, the company's midstream segment, plans to invest $2.4 billion in growth capital, with 90% directed towards natural gas and NGL services, targeting a distribution growth rate of 12.5% over the next two years [11][12] Q&A Session Summary Question: Capture rate performance - Management highlighted that the strong capture rate of 114% was driven by optimization through the commercial team and improved structural capabilities [25][26][28] Question: Return of capital expectations - Management indicated that based on current market conditions, they expect to match or exceed the previous year's capital return of $4.5 billion [31][32] Question: Incremental Venezuelan crude absorption - Management expressed confidence in their ability to absorb more Venezuelan crude, leveraging their system's capabilities and optimizing sour crude processing [35][36][39] Question: CapEx guidance and negotiations with USW - Management confirmed that CapEx for 2026 is expected to be lower than in 2025, and negotiations with the USW are ongoing with positive dialogue [62][65][66]

FOURTH QUARTER 2025 EARNINGS CONFERENCE CALL February 3, 2026 M P C | 4 Q 2 0 2 5 1 M P C | 4 Q 2 0 2 5 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements regarding Marathon Petroleum Corporation (MPC). These forward-looking statements may relate to, among other things, MPC's expectations, estimates and projections concerning its business and operations, financial priorities, strategic plans and initiatives, capital return plans, capital expenditure plans, operating cost reduct ...