As of December 15, 2025, Marathon Petroleum Corp's estimated intrinsic value ranges from $122.55 to $510.44 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $228.78 | +23.2% |
| Discounted Cash Flow (5Y) | $222.34 | +19.7% |
| Dividend Discount Model (Multi-Stage) | $171.70 | -7.6% |
| Dividend Discount Model (Stable) | $122.55 | -34.0% |
| Earnings Power Value | $510.44 | +174.8% |
Is Marathon Petroleum Corp (MPC) undervalued or overvalued?
With the current market price at $185.77, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Marathon Petroleum Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 1.08 | 1.27 |
| Cost of equity | 8.9% | 12.0% |
| Cost of debt | 4.3% | 5.1% |
| Tax rate | 16.7% | 18.8% |
| Debt/Equity ratio | 0.49 | 0.49 |
| After-tax WACC | 7.1% | 9.4% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $222 | $97,744M | 80.0% |
| 10-Year Growth | $229 | $99,681M | 61.6% |
| 5-Year EBITDA | $138 | $72,515M | 73.0% |
| 10-Year EBITDA | $160 | $79,111M | 51.6% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $14,915M |
| Discount Rate (WACC) | 9.4% - 7.1% |
| Enterprise Value | $158,919M - $209,779M |
| Net Debt | $30,910M |
| Equity Value | $128,009M - $178,869M |
| Outstanding Shares | 301M |
| Fair Value | $426 - $595 |
| Selected Fair Value | $510.44 |
| Metric | Value |
|---|---|
| Market Capitalization | $55842M |
| Enterprise Value | $86752M |
| Trailing P/E | 19.37 |
| Forward P/E | 11.96 |
| Trailing EV/EBITDA | 7.60 |
| Current Dividend Yield | 202.71% |
| Dividend Growth Rate (5Y) | -6.50% |
| Debt-to-Equity Ratio | 0.49 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $68.63 |
| Discounted Cash Flow (5Y) | 25% | $55.58 |
| Dividend Discount Model (Multi-Stage) | 20% | $34.34 |
| Dividend Discount Model (Stable) | 15% | $18.38 |
| Earnings Power Value | 10% | $51.04 |
| Weighted Average | 100% | $227.98 |
Based on our comprehensive valuation analysis, Marathon Petroleum Corp's intrinsic value is $227.98, which is approximately 22.7% above the current market price of $185.77.
Key investment considerations:
Given these factors, we believe Marathon Petroleum Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.