Investing

Earnings Previews: BP, Enterprise Products, Marathon Petroleum, Newmont

Marathon Petroleum

Oil refiner and marketer Marathon Petroleum Corp. (NYSE: MPC) posted an all-time high share price on Thursday and has posted a stock price gain of nearly 72% over the past year. That is a far larger increase than rival Phillips 66’s 34% gain or Valero’s gain of 63%. While margins in the company’s mid-continent refineries are not at the sky-high levels of Atlantic Coast refineries, profits are likely to continue pouring in at ever higher levels. Valero reported earlier this week that its refining margin more than doubled year over year in the third quarter.

Of 17 brokerages covering Marathon, 13 have a Buy or Strong Buy rating and the rest rate the stock at Hold. At a share price of around $113.70, the stock’s upside potential based on a median price target of $125.00 is about 9.9%. At the high target of $140.00, the upside potential is 23.1%.

Third-quarter revenue is forecast at $40.77 billion, down 24.8% sequentially but up by 25.0% year over year. Analysts are estimating EPS of $7.06, down 33.8% sequentially and a whopping 1,000% higher year over year. For the full 2022 fiscal year, the consensus estimates call for EPS of $24.00, up nearly 880%, on revenue of $171.17 billion, up 41.5%.

Marathon Petroleum’s stock trades at about 4.7 times expected 2022 EPS, 8.8 times estimated 2023 earnings of $12.91 and 12.6 times estimated 2024 earnings of $8.99 per share. The stock’s 52-week range is $59.55 to $115.72. Marathon pays an annual dividend of $2.32 (yield of 2.05%). Total shareholder return for the past 12 months was 76.7%.

Newmont

Over the past 12 months, gold prices have declined by about 7.6%. Newmont Corp. (NYSE: NEM) has seen its share price fall by about 25.2% over the same 12-month period. Mining stocks, in general, are lower, but miners’ balance sheets are stronger because they are investing less in new projects and looking to reward shareholders with better dividends. Newmont’s free cash flow per share for the past 12 months is $3.01, more than 15% higher than its dividend payment.

Analysts remain cautious on Newmont stock, with half of 20 brokerages giving the shares a Hold rating, while nine have Buy or Strong Buy ratings. At a share price of around $43.10, the upside potential based on a median price target of $53.00 is 23%. At the high price target of $79.52, the upside potential is 84.5%.


Third-quarter revenue is forecast at $2.88 billion, down 6% sequentially and flat year over year. Adjusted EPS are forecast at $0.34, down 25.5% sequentially and down 43.3% year over year. For the full 2022 fiscal year, estimates call for EPS of $2.02, down 31.8%, on sales of $12 billion, down 1.8%.

Newmont stock trades at about 21.3 times expected 2022 earnings, 20.8 times estimated 2023 earnings of $2.07 and 18.3 times estimated 2024 earnings of $2.35 per share. The stock’s 52-week range is $40.00 to $86.37. Newmont pays an annual dividend of $2.20 (yield of 5.15%). Total shareholder return for the past year was negative 22.2%.

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