MPLX is a Good Value Play for the Oil & Gas Industry

“Is there room for the MPLX stock to grow?”. This analysis uses 2 valuation methods to determine an MPLX Stock Forecast, which can help us to see if the MPLX stock is a worthwhile investment.

Mplx lp (NYSE: MPLX) operates within the Oil & Gas Midstream industry. This analysis will take into account several assumptions to examine MPLX’s key financial metrics and ratios to determine an MPLX stock forecast.

Stock forecasting is hard, I don’t know what the future will hold, and if I did I would extremely wealthy and never have to work again. What I can do is use available data to arrive at the best guess for an MPLX stock forecast.

$31.72 MPLX Stock Forecast for 2023

This price target of $31.72 resulted from the implementation of the 2 following valuation methods (which are averaged for the final stock forecast).

  1. MPLX Financial Growth
  2. MPLX Comparable Analysis

Using PE and EPS for an MPLX Price Prediction

MPLX’s forward EPS for 2023 is supposed to reach $3.40. Furthermore, MPLX’s forward PE ratio for 2023 is forecasted to be 9.19. By multiplying these two metrics together, we can reach an MPLX stock forecast which results in a price target of $31.25 per share

This is only one method that we can use to forecast the MPLX stock price, but I would argue that using both P/E and EPS is a very common valuation method used by analysts and investors.

Another MPLX Stock Forecast But Using a Comparable Analysis

MPLX Competitors:

For a comparable analysis, we need to compile a list of MPLX’s main competitors. These competitors need; a stock, financial ratios, operations similar to that of MPLX, and a similar market cap to MPLX.

Keeping this in mind, here are MPLX’s closest competitors:

OXY, DVN, VLO, WMB, ET, OKE, CVE, PSX, EC, HES

PE and PB Comparable Analysis to Determine an MPLX Price Forecast

  1. Price to Book (P/B): MPLX’s P/B ratio is 2.54, compared to the average P/B ratio of its peers being 2.54. This means that MPLX is overvalued and should decrease by a factor of -0.22% to reach “fair value” (based on MPLX’s P/B compared to the P/B of its peers).
  2. Price to Earnings (P/E): MPLX’s P/E ratio is 10.31, compared to the average P/E of MPLX’s peers being 11.46. This implies that MPLX is undervalued and its share price should increase by a factor of 11.15% to be at “fair value” (based on MPLX’s P/E compared to the P/E of its peers).

The MPLX stock is currently undervalued and should experience a change in its stock price of (an average of) 5.46% to be considered “at fair value”. Applying this to MPLX’s price of $30.52, results in an MPLX stock forecast of $32.19

Do MPLX Analysts Agree With Our MPLX Stock Forecast?

Analyst Ratings have provided a relatively strong indicator of future price movement, which is why they are used to (hopefully) support our MPLX stock forecast. There are a total of 24 analyst ratings for MPLX, which are distributed as follows:

17 Buys

7 Holds

0 Sells

As you may have been able to tell 70.83% of analysts have given the MPLX stock a ‘buy” rating. Based on the current MPLX analyst ratings there seems to be an overall bullish sentiment, with analyst “buy” ratings forming a majority of total ratings given. This is great news for us as it further solidifies my confidence that the price target of $31.72 reached in the analysis is likely to be correct.

Concluding this MPLX Stock Analysis

Based on the overall MPLX stock forecast of $31.72 per share (derived from P/E & EPS, and comparable valuations), the current price of MPLX being $30.52, and the overall bullish analyst sentiment for the MPLX stock, I would agree with the analysts and say MPLX is a buy.

Let me know what you think, happy to dive into other aspects of MPLX to help you make an informed investment decision.

Originally published at https://utradea.com.

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