On Monday, Citi reiterated a Neutral rating on MPLX LP (NYSE:MPLX).
The firm's analysis anticipates fourth-quarter 2024 EBITDA of $1.695 billion for MPLX, aligning with the average Wall Street estimate. The forecast reflects a sequential decline in EBITDA, attributed to decreased equity distributions following an unusually high distribution in the third quarter of 2024 and a reduction in guided Marathon Petroleum Corporation (NYSE:MPC) utilization rates from approximately 94% to 90%.
However, increased EBITDA from the Gathering and Processing (G&P) segment is expected to mitigate these decreases, thanks to favorable commodity prices and ongoing volume growth from newly operational processing capacities.
Reiterating a price target of $47.00 Citi's outlook also includes an expectation for MPLX to provide capital expenditure (capex) guidance for 2025 alongside its earnings report. The firm suggests that to sustain mid-single-digit EBITDA growth, MPLX's capital spending might exceed its historical average of around $1 billion per year.
Additionally, the analysis includes a projection of approximately $75 million in share buybacks for the fourth quarter of 2024. MPLX's upcoming earnings report is also set to clarify the company's plans for capital expenditures in 2025.
According to Citi, there are indications from the previous quarter that MPLX may need to increase its capex to maintain its target EBITDA growth rate. This development will be closely watched by investors as it could impact the company's financial strategy moving forward.
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