A Bull Case For Marathon Petroleum As Margins For Refining Become More Profitable

Oil refining and transportation company Marathon Petroleum Corp MPC received positive analysis from Mizuho securities analysts looking at the oil and gas sector.

Marathon Petroleum analyst Nitin Kumar upgraded shares to Buy, raising its price target from $133 to $160.

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Marathon Petroleum Takeaways: Mizuho took a look at the U.S. oil and gas sector as the earnings season for the fourth quarter nears its end.

The analysis stated it was, "still constructive on the sector." 

"Not only did investors want to confirm that shale capital discipline would hold, there were fears that capital efficiencies would be lower because of weaker well productivity and/or higher costs," Mizhuho wrote. "Overall, we believe the 2023 outlooks from U.S. Oil & Gas companies allayed these fears."

An upgraded margin of around 10% for refining activity also impressed Mizhuho.

"The company underscored its commitment to cash returns with an incremental buyback, while cash flows are set to accelerate as the Martinez project becomes operational," wrote Mizuho.

Mizhuo shared its top picks for the oil and gas sector: Diamondback Energy Inc FANG, Exxon Mobil Corp XOM and Coterra Energy Inc CTRA.

MPC Price Action: Marathon Petroleum is up 1.84% on Friday with a current price of $130.84.

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