Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Marathon Petroleum Corp., EBITDA calculation
US$ in millions
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).
The financial performance from 2019 through 2023 is characterized by extreme volatility, featuring a severe contraction in 2020, a substantial expansion in 2022, and a partial correction in 2023.
- Earnings Volatility and Recovery
- A significant downturn occurred in 2020, with EBITDA falling from 9,205 million US$ in 2019 to negative 8,904 million US$. This collapse is reflected across all profitability metrics, including a net loss of 9,826 million US$. A recovery phase began in 2021, as EBITDA returned to a positive 7,448 million US$, signaling a restoration of operating profitability, although levels remained below the 2019 baseline.
- Peak Performance and Stabilization
- The fiscal year 2022 represents the peak of the analyzed period, with EBITDA surging to 24,879 million US$, more than triple the previous year's results. This peak is mirrored in net income, which reached 14,516 million US$. In 2023, a downward adjustment is observed, with EBITDA declining to 18,561 million US$ and net income decreasing to 9,681 million US$. Despite this decline, the 2023 figures remain substantially higher than the levels seen in 2019 and 2021.
- Operational Consistency and Depreciation
- Analysis of the spread between EBITDA and EBIT reveals a relatively stable level of depreciation and amortization expenses over the five-year duration. While operating earnings experienced drastic swings, the difference between these two metrics remained consistent, suggesting that the company's capital asset base and related non-cash charges remained steady regardless of the volatility in net income or EBT.
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Enterprise Value to EBITDA Ratio, Current
Marathon Petroleum Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 71,226) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 18,561) |
| Valuation Ratio | |
| EV/EBITDA | 3.84 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Chevron Corp. | 11.45 |
| ConocoPhillips | 7.43 |
| Exxon Mobil Corp. | 11.14 |
| EV/EBITDA, Sector | |
| Oil, Gas & Consumable Fuels | 9.24 |
| EV/EBITDA, Industry | |
| Energy | 9.29 |
Based on: 10-K (reporting date: 2023-12-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Marathon Petroleum Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 83,564) | 77,259) | 63,196) | 73,795) | 66,555) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 18,561) | 24,879) | 7,448) | (8,904) | 9,205) | |
| Valuation Ratio | ||||||
| EV/EBITDA3 | 4.50 | 3.11 | 8.48 | — | 7.23 | |
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Chevron Corp. | 6.34 | 4.74 | 7.18 | — | — | |
| ConocoPhillips | 5.64 | 3.82 | 6.34 | — | — | |
| Exxon Mobil Corp. | 5.81 | 4.54 | 7.07 | — | — | |
| EV/EBITDA, Sector | ||||||
| Oil, Gas & Consumable Fuels | 5.95 | 4.47 | 6.97 | — | — | |
| EV/EBITDA, Industry | ||||||
| Energy | 6.18 | 4.75 | 7.24 | — | — | |
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).
3 2023 Calculation
EV/EBITDA = EV ÷ EBITDA
= 83,564 ÷ 18,561 = 4.50
4 Click competitor name to see calculations.
The financial data indicates a period of significant volatility in operational earnings coupled with a general upward trend in enterprise value between 2019 and 2023. While the enterprise value experienced a brief contraction in 2021, it grew from 66,555 million US$ to 83,564 million US$ over the five-year period, reflecting an overall increase in the total market valuation of the entity.
- EBITDA Volatility
- Earnings before interest, tax, depreciation, and amortization exhibited extreme fluctuations. A substantial decline occurred in 2020, where EBITDA fell to negative 8,904 million US$, rendering the EV/EBITDA ratio inapplicable for that period. A strong recovery followed, culminating in a peak of 24,879 million US$ in 2022, before moderating to 18,561 million US$ in 2023.
- EV/EBITDA Ratio Trends
- The EV/EBITDA ratio shifted from 7.23 in 2019 to a peak of 8.48 in 2021, signaling a higher valuation relative to earnings during the initial recovery phase. This ratio compressed sharply to 3.11 in 2022, driven by the surge in EBITDA. By 2023, the ratio increased to 4.50, resulting from a combination of rising enterprise value and declining EBITDA.
- Valuation Correlation
- An inverse relationship is observed between the magnitude of EBITDA and the EV/EBITDA multiple from 2021 to 2023. The significant expansion of earnings in 2022 led to the lowest valuation multiple in the series, suggesting that the growth in operational profitability far outpaced the growth in enterprise value during that fiscal year.
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