Think It’s Too Late to Buy Marathon and Valero? Here’s Why Analysts Say Wait Instead
Marathon and Valero have surged more than 150% this year, and the valuations look surprisingly reasonable at first glance. But analysts are flashing a warning sign that retirement investors chasing these stocks right now may be missing entirely.
Both Marathon Petroleum (NYSE:MPC | MPC Price Prediction) and Valero Energy (NYSE:VLO) stocks have gone vertical this year, with the former up 157.1% to $413.20 in premarket trading on September 17, 2026, and the latter up 152.4% year to date to $404.84. Both sit within a whisper of their 52-week highs. The retirement investor who watched from the sidelines is asking whether it is too late to get in.
What Drove the Run
A crack spread is the profit a refiner earns turning a barrel of crude into gasoline, diesel, or jet fuel. Those spreads roughly doubled in 2026 as Ukrainian drone strikes knocked out more than 2.8 million barrels of Russian refining capacity, Middle East disruptions took additional supply offline, and permanent refinery closures in Europe and North America structurally lowered the supply floor. Marathon management estimated over 9 million barrels per day of global capacity was down, roughly 4 million barrels per day above historical norms. U.S. gasoline and distillate inventories rest at the bottom of their five-year range, per the EIA May 2026 Short-Term Energy Outlook.
Marathon and Valero delivered combined profits of around $8.8 billion in the second quarter of 2026, comfortably topping Wall Street expectations, according to Insider Monkey (via Yahoo Finance).
Valuation: Cheap Multiple, Peak Earnings
Here the story gets uncomfortable. Marathon trades at a forward P/E of 13x, Valero at 14x. Both look reasonable on the surface. What the “E” reflects is the problem. Consensus 2026 EPS for Valero has been revised up from $29.33 ninety days ago to $43.83 today; Marathon’s from $29.78 to $53.08. Analysts already model a step-down in 2027, with Marathon at $33.95 and Valero at $31.21. A modest multiple on peak-cycle earnings makes for an expensive stock wearing a value mask.
Both trade above the street’s fair-value read. Marathon’s consensus target is $370.17 against a share price near $413; Valero’s is $355.47 against $405. The plurality rating on each is Hold, which is the street quietly telling buyers at these levels to wait.
Where They Differ, and What Cushions the Fall
Marathon’s majority stake in MPLX provides midstream cash flows supporting 12.5% annual distribution growth in 2026 and 2027, a genuine offset to refining cyclicality. Valero’s angle is a reopened gasoline arbitrage: European flow into the United States is closed while Latin American demand pulls product out of the Gulf Coast, leaving net gasoline imports down about 400,000 barrels a day. Both are returning cash aggressively. Valero sent $2.6 billion to shareholders in Q2 ’26; Marathon returned over $2.8 billion with $6.1 billion remaining on its buyback authorization.
Bear Case Is Simple
These margins stemmed from extraordinary conditions. Crack spreads can normalize quickly if Russian refineries come back online or Chinese product exports increase. The 52-week lows show how far the base rests below current prices: Marathon $161.93 and Valero $155.29. That is the range of a full de-rating if 2027 estimates prove aspirational.
Verdict
The setup here favors patience over pursuit. The run has priced in peak-cycle earnings, both stocks trade above consensus fair value, and Hold is the plurality call on each. Long-term holders continue to collect the dividend and buyback yield, while new money entering at these levels faces a valuation above consensus fair value. Watch the direction of crack spreads and whether each stock holds above its consensus target: a break below both flips the setup from wait to reconsider.
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Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community.
Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.
Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, moderating workshop sessions at regional conventions.
