Marathon Petroleum Faces EPS Decline Ahead of Earnings Report

In a recent report on Marathon Petroleum Corporation, significant EPS declines are anticipated, signaling potential pressures ahead of the Q3 earnings announcement. Despite this, the company has shown resilience in past quarters, hinting at a cautious investor outlook.

Date: 21-10-2024

AI Rating: 5

Marathon Petroleum Corporation (MPC), a key player in the energy sector, is expected to face notable challenges as it approaches the announcement of its Q3 earnings. Analysts forecast that MPC will report an Earnings Per Share (EPS) of $0.97, a significant drop of 88.1% compared to the $8.14 reported in the same quarter last year. This stark decline indicates potential difficulties for the company in maintaining profitability.

Furthermore, for the entire fiscal year 2024, analysts predict an EPS of $8.71, down 63.1% from $23.63 in fiscal 2023. However, there is a glimmer of hope as EPS is projected to rebound in fiscal 2025, expected to grow 21.4% year-over-year to approximately $10.57. This projected growth could help in reassuring investors about the company’s long-term viability.

Despite the anticipated decline, the company has a history of exceeding Wall Street’s forecasts, having surpassed EPS expectations by 35.5% in Q2 2024. This trend may provide some confidence to investors, suggesting that while the current quarter may not meet expectations, MPC could still navigate through this difficult period effectively.

In terms of stock performance, MPC shares have increased by 6.7% year-to-date, although this pales in comparison to the S&P 500 Index, which has gained nearly 23% in the same duration. This underperformance may serve as a warning signal to prospective investors. The consensus among analysts remains cautiously optimistic, with 12 out of 18 suggesting 'Strong Buy' while the share price currently trades below the average analyst price target of $177.89.

In summary, investors should consider the upcoming earnings report with caution, recognizing both the potential declines pointed out in the EPS figures while also acknowledging the company’s historic performance in surpassing expectations.

Stocks: MPC