Over the past two weeks, the world has been shaken into a new paradigm as President Trump has rolled out an aggressive new plan for global trade through tariffs between the United States and its biggest trading partners.
While reports suggest that most countries have approached the United States to negotiate the state of these tariffs, one loose end is still filling markets with uncertainty. And that country is China.
[content-module:CompanyOverview|NYSE: MPC]As of April 11, 2025, the United States imposed a total tariff rate of 145% on imports from China. This has triggered fears of a trade breakdown, pushing investors away from sectors closely tied to economic growth—especially the energy sector.
This is where oil prices, as low as they are today, come into play for investors to take advantage of what could be a favorable risk-to-reward ratio on the buying side. And one stock to watch is Marathon Petroleum Co. (NYSE: MPC).
Despite its deep slide into bear market territory, several Wall Street analysts have maintained a bullish outlook—highlighting confidence in the company’s long-term potential. And here's why.
Oil Markets Are One Spark Away from a Breakout
The whole world has fallen into the assumption that oil demand will be as low as any other global recession or financial crisis, and there is no evidence (yet) of that being the case today. This creates an opening for savvy investors to take a contrarian stance on the commodity going forward.
With the Federal Reserve (the Fed) reporting over 90% in capacity utilization for the petroleum industry, investors can note a couple of things.
First, oil inventories in the United States are so low that even with lower demand due to tariff uncertainty, the industry still operates at 90% compared to an average of 75%, and that is the case for most other countries today.
Second, any turnaround in demand, even a whiff of it, could send prices through the roof as there won’t be enough time to react, and the industry isn’t that nimble right now. Knowing that the deck is stacked in favor of higher oil prices, analysts are still willing to point to higher prices in Marathon Petroleum stock despite the consensus bearish momentum in the space.
The Market’s Take on Marathon Petroleum
Now that shares of Marathon Petroleum have fallen to 56% of their 52-week high levels, there are very few obvious reasons for anyone to become a buyer. The chart could play a heavy psychological hand on any investor’s morale.
[content-module:TradingView|NYSE: MPC]However, this is where the best deals are typically born.
When you consider the fundamental factors working in favor of higher oil prices, it's easy to see why analysts at Raymond James reiterated their Strong Buy rating on Marathon Petroleum as of April 2025, with a price target of $183 per share.
This view would call for a net implied upside of as much as 51% from where the stock trades today. Any evidence found in the price action that the stock could get closer to this would likely start to draw in more momentum buyers in Marathon Petroleum in the coming months and quarters.
Adding weight to this bullish case is the $3.2 billion of institutional capital that flowed into the stock last quarter, signaling that large-scale investors see an opportunity the broader market may be missing. In April alone so far, another $227 million poured in.
[content-module:Forecast|NYSE: MPC]Further fueling optimism is a sharp forecasted recovery in earnings. Analysts expect first-quarter 2025 EPS to hit $7.48, a dramatic reversal from the previous 6 cents—a potential game-changer for the stock’s trajectory.
Investors shouldn’t be reminded that wherever EPS goes, so does the stock price, and in the case of Marathon Petroleum, it all seems to point higher.
Even if the stock takes a bit longer than expected to trend into these valuation targets, investors can enjoy an added benefit in holding onto this name: the $3.64 dividend payout.
At today’s low prices, this would translate into an annualized dividend yield of up to 3.0% to cushion any time and volatility spent in this wait.
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