Can Marathon Petroleum Stock Recover If Markets Fall?

MPC: Marathon Petroleum logo
MPC
Marathon Petroleum

Marathon Petroleum (MPC) stock is down 13.8% in 21 trading days. The recent slide reflects renewed concerns around its Q3 earnings miss and elevated maintenance costs, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?

Before judging its downturn reslience, let’s look at where Marathon Petroleum stands today.

  • Size: Marathon Petroleum is a $50 Bil company with $133 Bil in revenue currently trading at $163.69.
  • Fundamentals: Last 12 month revenue growth of -6.1% and operating margin of 3.6%.
  • Liquidity: Has Debt to Equity ratio of 0.69 and Cash to Assets ratio of 0.03
  • Valuation: Marathon Petroleum stock is currently trading at P/E multiple of 17.2 and P/EBIT multiple of 7.2
  • Has one instance since 2010 where it dipped >30% in < 30 days and subsequently returned -2.1% within a year. See MPC Dip Buy Analysis.

These metrics point to a Very Weak operational performance, alongside Low valuation – making the stock Unattractive. For details, see Buy or Sell MPC Stock

That brings us to the key consideration for investors worried about this fall: how resilient is MPC stock if markets turn south? This is where our downturn resilience framework comes in. Suppose MPC stock falls another 20-30% to $115 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.

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2022 Inflation Shock

  • MPC stock fell 30.2% from a high of $113.65 on 7 June 2022 to $79.31 on 6 July 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
  • However, the stock fully recovered to its pre-Crisis peak by 27 October 2022
  • Since then, the stock increased to a high of $219.13 on 7 April 2024 , and currently trades at $163.69

  MPC S&P 500
% Change from Pre-Recession Peak -30.2% -25.4%
Time to Full Recovery 113 days 464 days

 
2020 Covid Pandemic

  • MPC stock fell 73.2% from a high of $61.91 on 2 January 2020 to $16.62 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
  • However, the stock fully recovered to its pre-Crisis peak by 1 June 2021

  MPC S&P 500
% Change from Pre-Recession Peak -73.2% -33.9%
Time to Full Recovery 435 days 148 days

 
2018 Correction

  • MPC stock fell 48.3% from a high of $86.39 on 3 October 2018 to $44.63 on 14 August 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
  • However, the stock fully recovered to its pre-Crisis peak by 8 April 2022

  MPC S&P 500
% Change from Pre-Recession Peak -48.3% -19.8%
Time to Full Recovery 968 days 120 days

 
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