Price to Operating Profit (P/OP)
since 2011
Calculation
Marathon Petroleum Corp., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Income (loss) from operations1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 28, 2024 | 4.16 | = | 167.16 | ÷ | 40.17 | 40.17 | = | 14,514 | ÷ | 361,358,732 | |
| Feb 23, 2023 | 2.60 | = | 125.52 | ÷ | 48.19 | 48.19 | = | 21,469 | ÷ | 445,546,907 | |
| Feb 24, 2022 | 9.79 | = | 74.46 | ÷ | 7.61 | 7.61 | = | 4,300 | ÷ | 565,212,958 | |
| Feb 26, 2021 | — | = | 54.62 | ÷ | -18.80 | -18.80 | = | -12,247 | ÷ | 651,274,842 | |
| Feb 28, 2020 | 5.52 | = | 47.42 | ÷ | 8.59 | 8.59 | = | 5,576 | ÷ | 649,503,967 | |
| Feb 28, 2019 | 7.50 | = | 62.01 | ÷ | 8.27 | 8.27 | = | 5,571 | ÷ | 673,619,190 | |
| Feb 28, 2018 | 7.68 | = | 64.06 | ÷ | 8.34 | 8.34 | = | 3,969 | ÷ | 476,059,729 | |
| Feb 24, 2017 | 11.10 | = | 50.03 | ÷ | 4.51 | 4.51 | = | 2,378 | ÷ | 527,782,929 | |
| Feb 26, 2016 | 3.86 | = | 34.22 | ÷ | 8.87 | 8.87 | = | 4,692 | ÷ | 529,227,453 | |
| Feb 27, 2015 | 7.08 | = | 52.50 | ÷ | 7.42 | 7.42 | = | 4,051 | ÷ | 546,125,760 | |
| Feb 28, 2014 | 7.22 | = | 42.00 | ÷ | 5.81 | 5.81 | = | 3,425 | ÷ | 589,128,462 | |
| Feb 28, 2013 | 5.14 | = | 41.44 | ÷ | 8.07 | 8.07 | = | 5,347 | ÷ | 662,867,852 | |
| Feb 29, 2012 | 3.86 | = | 20.78 | ÷ | 5.39 | 5.39 | = | 3,745 | ÷ | 695,228,266 |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Marathon Petroleum Corp. Annual Report.
The Price to Operating Profit (P/OP) ratio exhibits significant volatility over the analyzed period, reflecting a complex relationship between market valuation and operational performance. While the share price followed a consistent long-term upward trajectory, increasing from 20.78 US$ in 2012 to 167.16 US$ in 2024, the operating profit per share fluctuated substantially, leading to inconsistent valuation multiples.
- Historical Ratio Fluctuations
- Between 2012 and 2016, the P/OP ratio shifted from 3.86 to a peak of 7.22 in 2014 before returning to 3.86 in 2016. A notable spike occurred in February 2017, where the ratio reached its historical maximum of 11.10. This increase was driven by a reduction in operating profit per share to 4.51 US$, while the share price simultaneously rose to 50.03 US$, indicating a period where the market valuation was high relative to diminished operational earnings.
- Operational Anomaly and Recovery
- A critical disruption in the ratio is observed in February 2021, where the P/OP value is absent. This is attributed to a significant operational loss, with operating profit per share falling to -18.80 US$. Following this trough, the ratio reappeared in 2022 at 9.79 as operating profits returned to positive territory at 7.61 US$ per share.
- Recent Valuation Compression
- From 2022 to 2024, a sharp compression of the P/OP ratio is evident, falling from 9.79 to 4.16. This downward trend was not caused by a decline in share price—which actually rose from 74.46 US$ to 167.16 US$—but by a massive surge in operating profitability. Operating profit per share peaked at 48.19 US$ in 2023, causing the P/OP ratio to drop to 2.60, its lowest point in the observed sequence, before settling at 4.16 in 2024.
In summary, the data indicates that recent years have been characterized by a decoupling of share price growth and the P/OP ratio, as exceptional growth in operating profits has outpaced the increase in market price, leading to a more conservative valuation multiple despite record-high share prices.
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