QS Research · Michael Burry's Scion Capital analyst template · 2006
Marathon Petroleum Corp (MPC)
As of 2026-11-08 · 11/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction high · base case -71% · downside -74% · upside -2%
Section 13's cycle base is the right one: FY2020-FY2025 average EBITDA is $10.50B and normalized FCF $6.60B, versus TTM to Sep 30, 2026 EBITDA of $25.18B and FCF of $20.84B (S2, N14, N18), so TTM is peak-like, not mid-cycle. At MPC's own quoted 4.8x EV/EBITDA (N28), normalized EBITDA gives $50.40B EV, less $19.88B net debt and $1.48B leases (N24, N23) = $29.04B equity / 272.28M shares (N5) = $106.66, -71.4%. Downside at FY2024 EBITDA of $10.01B ($6.80B operating income + $3.21B D&A, S2/S27) and 4.8x is $98.02, -73.7%; upside at TTM EBITDA $25.18B and 4.8x is $365.45, -2.0%. The market is paying for Q3 2026's $45.70/bbl R&M margin to persist even though Q4 2026 guidance gives 3,080 mbpd throughput versus 3,150 mbpd in Q3 2026 and no Q4 margin outlook (S28, S30), while capital-return catalysts support cash return but not mid-cycle earnings. Short, with high conviction because all three cases sit below today's $372.74.
Key numbers
- Share price: $372.74
- Market cap: $101.49B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $174.80B
- EV / EBITDA (TTM): 4.8x
- P/E (TTM): 6.9x
- Price / book: 4.37x
The 15 boxes
- ✓ 1. Long-form business notes
MPC is a refining and marketing company with a midstream arm primarily through MPLX; the FY2020 10-K describes two reportable segments, about 2.9 million barrels per day of refining capacity, and channels including wholesale, spot, Marathon-branded outlets, ARCO direct dealers and roughly 3,800 Speedway locations, with Speedway under a $21 billion sale agreement. The XBRL record shows the cycle: revenue was $177.45B in FY2022, $148.38B in FY2023, $138.86B in FY2024 and $132.70B in FY2025; operating income was $21.47B, $14.51B, $6.80B and $8.29B; operating cash flow was $16.36B, $14.12B, $8.66B and $8.25B. The latest 10-K excerpt adds Dec 31, 2025 debt of $33.31B including $26.01B at MPLX and goodwill of $9.4B.
- ○ 2. Competitive advantage
Nothing in the numbers shows a durable advantage: operating income ran from -$12.25B (FY2020) to $21.47B (FY2022) to $8.29B (FY2025) on revenue that moved with it, which is the profile of a price-taking refiner whose margin is set by spreads, not by brand or switching costs. The only concrete franchise assets the filings name are the Marathon and ARCO trademarks and FERC-regulated pipeline systems (whose rates are capped by an inflation index), and the 10-K itself says no single patent or licence is essential. Support for the share count came from buying stock in the good years (diluted shares 649M FY2020 to 306M FY2025) rather than from widening margins.
- ✓ 3. 10-Q takeaways
Q3 2026 was an unusually strong quarter for MPC: sales and other operating revenues rose to $56.03B from $34.81B, R&M margin ran $45.70/bbl versus $17.60/bbl, and net income attributable to MPC was $7.45B ($26.59/diluted share) versus $1.37B ($4.51). The gain is operating, not one-off — the prior-year quarter, not this one, carried the $738M asset-sale gain and $484M/$254M equity-method gains — though Q3 2026 does include a $123M tax/legal settlement charge. Cash of $13.6B, no revolver borrowings, $3.3B returned in the quarter and a new $5.0B authorization support capital return, and management gave numeric Q4 2026 guidance (3,080 mbpd throughput, $1,725M distribution costs). Risk factors were unchanged from the FY2025 10-K.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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