QS Research · Michael Burry's Scion Capital analyst template · 2006
Marathon Petroleum Corp (MPC)
As of 2026-11-06 · 11/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction medium · base case -36% · downside -53% · upside -23%
MPC is priced on a TTM-to-Sep-2026 refinery-margin spike, not on mid-cycle earnings: normalized FY2021-FY2025 EBITDA is $14.37B versus $25.18B TTM, and normalized net income is $8.28B versus $14.62B TTM. Base case at 6.0x normalized EBITDA: $14.37B x 6.0 = $86.22B EV; less $21.36B net debt including leases = $64.86B equity; / 272.28M shares = $238/share, -36% from $372.74. The $175 downside at 4.8x is -53%, and the $286 upside at 6.9x, the SIC 2911 peer high, is still -23%, so even the generous normalized case does not support today's price. The stock works only if TTM crack spreads persist; I would short, with medium conviction because near-term margins can stay hot.
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, marketing and midstream company: the FY2020 10-K shows the largest U.S. refining system at about 2.9 mbpd capacity, wholesale and branded/direct-dealer channels, a pending $21B Speedway sale, and MPLX midstream consolidation. The latest excerpt highlights $33.31B of debt at Dec 31, 2025, including $26.01B at MPLX, plus competitive and regulatory pressures. FY2020-FY2025 data show a sharp cycle: revenue fell from $177.45B in FY2022 to $132.70B in FY2025, operating income from $21.47B to $8.29B, and operating cash flow from $16.36B to $8.25B, while buybacks and share count changed materially.
- ○ 2. Competitive advantage
The supplied sources show a large, capital-intensive refining and marketing company with material Marathon/ARCO trademarks and some FERC-regulated pipeline rates, but they do not establish a durable cost, network, switching-cost or share advantage. Results are cycle-driven: operating income moved from -$12.25B in FY2020 to $21.47B in FY2022 and $8.29B in FY2025, with operating margin from -17.6% to 12.1% to 6.3%. Regulatory licences and grandfathered pipeline rates are real assets, but FERC refund/rate risk and rising environmental/RFS compliance costs offset them. TTM figures are not in the supplied sources, so the cycle-normalized comparison cannot be shown from this material.
- ✓ 3. 10-Q takeaways
Q3 2026 was a huge margin quarter: consolidated sales and other operating revenues rose to $56.032B from $34.809B in Q3 2025, and Refining & Marketing margin was $45.70/bbl versus $17.60/bbl. Operating income was $10.450B in Q3 2026 versus $2.713B in Q3 2025; net income attributable to MPC was $7.447B, with Q3 2026 carrying a $123M tax/legal settlement charge while Q3 2025 included $738M of asset-sale gains and $57M SRE. Buybacks and portfolio moves continue: an added $5.0B authorization on November 3, 2026 and a $4.2B cash divestiture announced November 2, 2026. The excerpt gives Q3 and 9M 2026, not TTM.
- ✓ 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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