UPDATE: Citigroup Downgrades Marathon Petroleum to Neutral, Raises PT
In a report published Monday, Citigroup downgraded its rating on Marathon Petroleum Corp. (NYSE: MPC) from Buy to Neutral, but raised its price target from $52.00 to $55.00.
Citigroup noted, “We are downgrading MPC from Buy to Neutral on valuation. We continue to remain bullish on US refining over the long run, however, current valuations no longer support a Buy rating. We are moving our target price up modestly to $55 p/s to incorporate higher estimates for 2012 and 2013. We are changing our mid-cycle estimate from $4.93 p/s to $5.15 p/s. Our matrix analysis yields values between $49 and $54 p/s. We estimate MPC trades at 10.8x our mid-cycle EPS estimate and $1,015/per complex barrel. This compares to a 9.0 P/E multiple for the sector over the last 10 years and recent asset sale prices of $1024/complex barrel. Our midcycle estimate now incorporates $3 and $2 per barrel WTI-LLS and LLS-Brent differentials over the long run.”
Marathon Petroleum Corp. closed on Friday at $55.61.
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