Marathon Petroleum 2Q26 Earnings Preview

Research evidence excerpt

Marathon Petroleum 2Q26 Earnings Preview

underpinning the 12.5% distribution growth to MPC. In Renewable Diesel, Q2 3.96 15.55 8.60

Q3 3.01 13.29 9.04

we estimate a pre-tax profit of $52 MM, which compares to the 1Q pre-tax loss Q4 4.07 7.35 6.85

of $(30) MM. The improvement is driven by higher throughput following the FY 10.80 37.84 31.88

Martinez turnaround (guidance of low-90% utilization), a stronger margin

Style Exposureenvironment, and rising RINs prices, partially offset by the absence of the 1Q 45Z

clean fuel production tax credit catch-up. Overall, we estimate 2Q EBITDA

(including turnarounds) of $7,413 MM (vs STe $6,678 MM). On cash flow, we

model 2Q CFO of $4,842 MM (including our estimate of a $900 MM WC

headwind, driven by the June crude price decline). Our model estimates FCF

of $3,863 MM on capex of $979 MM. We forecast $2.5 B of share buybacks

and $287 MM of dividends during the quarter. After marking our model to market

and incorporating the recent strip cracks, we maintain our Neutral rating and

increase our PT to $300 per share (from $257 previously).

• Thoughts on 3Q. Management is currently observing strong margins, but the

forward trajectory hinges on how the Iran conflict progresses. MPC notes that

higher volumes are now coming out of the Strait, with crude and product flows

resuming. Management continues to see potential for product market

dislocations extending into 2027 as damaged infrastructure repair timelines

remain uncertain, including questions around Russia's ban on product exports

and the pace of its refinery repairs. Importantly, MPC expects global inventory

rebuilding to provide a floor to pricing. On turnarounds, with full-year spend

unchanged at $1.35B, ~40% were completed in 1Q ($530 MM), and $300 MM