We are initiating coverage on Marathon Petroleum Corp. (MPC) with an Outperform recommendation and a target price of $51. Spun out of parent Marathon Oil Co. in June 2011, the company is a leading refiner and marketer of petroleum products in the U.S.
Our bullish investment theme stems from Marathon Petroleum's scale advantage, impressive asset quality, and an extensive midstream/retail network that diversifies its portfolio and provides more stable revenue streams. We believe management's recently approved $2 billion share repurchase program and potential formation of a midstream MLP could further boost shareholder value.
Marathon Petroleum's low debt ratio and hefty cash balance add to the positive sentiment. All in all, we believe the company is well positioned going forward and view it as an attractive investment.
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