NEW YORK (TheStreet) -- Marathon Petroleum Corp. (MCP) was downgraded to "market perform" from "outperform" at Wells Fargo on Wednesday.

The firm said it lowered its rating on the company, which is engaged in the business of refining, transporting, and marketing petroleum products in the U.S., based on its belief that new global capacity will weigh on industry margins in the coming year.

Wells Fargo changed its price target range to $38-$41, from $38-$42 on Marathon Petroleum stock.

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Shares of Marathon Petroleum are lower by 0.85% to $81.50 in pre-market trading this morning.

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Separately, TheStreet Ratings team rates MARATHON PETROLEUM CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate MARATHON PETROLEUM CORP (MPC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels, good cash flow from operations, impressive record of earnings per share growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 300.0% when compared to the same quarter one year prior, rising from $168.00 million to $672.00 million.
  • Net operating cash flow has significantly increased by 164.86% to $1,078.00 million when compared to the same quarter last year. In addition, MARATHON PETROLEUM CORP has also vastly surpassed the industry average cash flow growth rate of -1.58%.
  • The current debt-to-equity ratio, 0.58, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that MPC's debt-to-equity ratio is low, the quick ratio, which is currently 0.69, displays a potential problem in covering short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, MARATHON PETROLEUM CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: MPC Ratings Report

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