Intrinsic value of MPLX - MPLX

Previous Close

$32.80

  Intrinsic Value

$6.00

stock screener

  Rating & Target

str. sell

-82%

  Value-price divergence*

+21%

Previous close

$32.80

 
Intrinsic value

$6.00

 
Up/down potential

-82%

 
Rating

str. sell

 
Value-price divergence*

+21%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of MPLX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 12.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  169.41
  37.20
  33.98
  31.08
  28.47
  26.13
  24.01
  22.11
  20.40
  18.86
  17.47
  16.23
  15.10
  14.09
  13.18
  12.37
  11.63
  10.97
  10.37
  9.83
  9.35
  8.91
  8.52
  8.17
  7.85
  7.57
  7.31
  7.08
  6.87
  6.69
  6.52
Revenue, $m
  2,589
  3,552
  4,759
  6,238
  8,015
  10,109
  12,536
  15,308
  18,431
  21,907
  25,736
  29,912
  34,430
  39,283
  44,462
  49,960
  55,770
  61,887
  68,304
  75,021
  82,035
  89,348
  96,964
  104,887
  113,124
  121,686
  130,583
  139,829
  149,439
  159,429
  169,818
Variable operating expenses, $m
 
  2,367
  3,096
  3,988
  5,060
  6,323
  7,787
  9,460
  11,344
  13,441
  15,750
  18,045
  20,771
  23,699
  26,823
  30,140
  33,646
  37,335
  41,207
  45,259
  49,491
  53,903
  58,497
  63,277
  68,246
  73,412
  78,779
  84,357
  90,154
  96,181
  102,449
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,082
  2,367
  3,096
  3,988
  5,060
  6,323
  7,787
  9,460
  11,344
  13,441
  15,750
  18,045
  20,771
  23,699
  26,823
  30,140
  33,646
  37,335
  41,207
  45,259
  49,491
  53,903
  58,497
  63,277
  68,246
  73,412
  78,779
  84,357
  90,154
  96,181
  102,449
Operating income, $m
  507
  1,185
  1,664
  2,250
  2,955
  3,786
  4,749
  5,848
  7,087
  8,466
  9,985
  11,866
  13,659
  15,584
  17,639
  19,820
  22,125
  24,551
  27,097
  29,762
  32,544
  35,446
  38,467
  41,610
  44,878
  48,274
  51,804
  55,472
  59,284
  63,248
  67,369
EBITDA, $m
  1,053
  2,025
  2,713
  3,557
  4,570
  5,764
  7,148
  8,728
  10,509
  12,491
  14,674
  17,055
  19,631
  22,398
  25,351
  28,486
  31,798
  35,286
  38,945
  42,774
  46,774
  50,943
  55,285
  59,803
  64,500
  69,381
  74,454
  79,726
  85,205
  90,901
  96,825
Interest expense (income), $m
  212
  217
  312
  431
  577
  753
  960
  1,200
  1,475
  1,784
  2,128
  2,506
  2,919
  3,366
  3,847
  4,359
  4,903
  5,478
  6,083
  6,718
  7,382
  8,076
  8,800
  9,553
  10,337
  11,152
  11,999
  12,879
  13,794
  14,745
  15,733
Earnings before tax, $m
  246
  968
  1,352
  1,819
  2,378
  3,033
  3,788
  4,648
  5,613
  6,683
  7,858
  9,360
  10,739
  12,217
  13,792
  15,461
  17,222
  19,073
  21,014
  23,044
  25,162
  27,369
  29,667
  32,057
  34,541
  37,122
  39,805
  42,593
  45,490
  48,503
  51,636
Tax expense, $m
  -12
  261
  365
  491
  642
  819
  1,023
  1,255
  1,515
  1,804
  2,122
  2,527
  2,900
  3,299
  3,724
  4,174
  4,650
  5,150
  5,674
  6,222
  6,794
  7,390
  8,010
  8,655
  9,326
  10,023
  10,747
  11,500
  12,282
  13,096
  13,942
Net income, $m
  256
  706
  987
  1,328
  1,736
  2,214
  2,766
  3,393
  4,097
  4,878
  5,736
  6,833
  7,840
  8,919
  10,068
  11,286
  12,572
  13,924
  15,340
  16,822
  18,368
  19,980
  21,657
  23,401
  25,215
  27,099
  29,058
  31,093
  33,208
  35,407
  37,694

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  234
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  17,509
  23,681
  31,727
  41,589
  53,431
  67,390
  83,573
  102,054
  122,874
  146,049
  171,571
  199,413
  229,533
  261,884
  296,413
  333,068
  371,803
  412,578
  455,362
  500,138
  546,900
  595,655
  646,424
  699,244
  754,161
  811,240
  870,555
  932,194
  996,258
  1,062,860
  1,132,123
Adjusted assets (=assets-cash), $m
  17,275
  23,681
  31,727
  41,589
  53,431
  67,390
  83,573
  102,054
  122,874
  146,049
  171,571
  199,413
  229,533
  261,884
  296,413
  333,068
  371,803
  412,578
  455,362
  500,138
  546,900
  595,655
  646,424
  699,244
  754,161
  811,240
  870,555
  932,194
  996,258
  1,062,860
  1,132,123
Revenue / Adjusted assets
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
Average production assets, $m
  11,182
  15,342
  20,555
  26,943
  34,615
  43,659
  54,143
  66,115
  79,604
  94,618
  111,152
  129,189
  148,703
  169,662
  192,031
  215,778
  240,873
  267,289
  295,007
  324,015
  354,309
  385,895
  418,786
  453,005
  488,583
  525,562
  563,989
  603,922
  645,426
  688,574
  733,446
Working capital, $m
  105
  -178
  -238
  -312
  -401
  -505
  -627
  -765
  -922
  -1,095
  -1,287
  -1,496
  -1,721
  -1,964
  -2,223
  -2,498
  -2,789
  -3,094
  -3,415
  -3,751
  -4,102
  -4,467
  -4,848
  -5,244
  -5,656
  -6,084
  -6,529
  -6,991
  -7,472
  -7,971
  -8,491
Total debt, $m
  5,422
  7,791
  10,776
  14,434
  18,828
  24,007
  30,011
  36,867
  44,591
  53,189
  62,658
  72,987
  84,162
  96,164
  108,974
  122,573
  136,944
  152,071
  167,944
  184,556
  201,905
  219,993
  238,828
  258,424
  278,799
  299,975
  321,981
  344,849
  368,617
  393,326
  419,023
Total liabilities, $m
  6,417
  8,786
  11,771
  15,429
  19,823
  25,002
  31,006
  37,862
  45,586
  54,184
  63,653
  73,982
  85,157
  97,159
  109,969
  123,568
  137,939
  153,066
  168,939
  185,551
  202,900
  220,988
  239,823
  259,419
  279,794
  300,970
  322,976
  345,844
  369,612
  394,321
  420,018
Total equity, $m
  11,092
  14,895
  19,957
  26,159
  33,608
  42,389
  52,568
  64,192
  77,288
  91,865
  107,918
  125,430
  144,376
  164,725
  186,444
  209,500
  233,864
  259,512
  286,423
  314,587
  344,000
  374,667
  406,601
  439,824
  474,367
  510,270
  547,579
  586,350
  626,646
  668,539
  712,105
Total liabilities and equity, $m
  17,509
  23,681
  31,728
  41,588
  53,431
  67,391
  83,574
  102,054
  122,874
  146,049
  171,571
  199,412
  229,533
  261,884
  296,413
  333,068
  371,803
  412,578
  455,362
  500,138
  546,900
  595,655
  646,424
  699,243
  754,161
  811,240
  870,555
  932,194
  996,258
  1,062,860
  1,132,123
Debt-to-equity ratio
  0.489
  0.520
  0.540
  0.550
  0.560
  0.570
  0.570
  0.570
  0.580
  0.580
  0.580
  0.580
  0.580
  0.580
  0.580
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
  0.590
Adjusted equity ratio
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  256
  706
  987
  1,328
  1,736
  2,214
  2,766
  3,393
  4,097
  4,878
  5,736
  6,833
  7,840
  8,919
  10,068
  11,286
  12,572
  13,924
  15,340
  16,822
  18,368
  19,980
  21,657
  23,401
  25,215
  27,099
  29,058
  31,093
  33,208
  35,407
  37,694
Depreciation, amort., depletion, $m
  546
  841
  1,050
  1,307
  1,615
  1,978
  2,399
  2,880
  3,421
  4,024
  4,688
  5,188
  5,972
  6,814
  7,712
  8,666
  9,674
  10,734
  11,848
  13,013
  14,229
  15,498
  16,819
  18,193
  19,622
  21,107
  22,650
  24,254
  25,921
  27,654
  29,456
Funds from operations, $m
  1,349
  1,547
  2,037
  2,635
  3,350
  4,192
  5,164
  6,273
  7,519
  8,903
  10,424
  12,021
  13,812
  15,732
  17,780
  19,952
  22,246
  24,658
  27,188
  29,835
  32,598
  35,477
  38,476
  41,594
  44,837
  48,206
  51,708
  55,347
  59,129
  63,061
  67,150
Change in working capital, $m
  61
  -48
  -60
  -74
  -89
  -105
  -121
  -139
  -156
  -174
  -191
  -209
  -226
  -243
  -259
  -275
  -291
  -306
  -321
  -336
  -351
  -366
  -381
  -396
  -412
  -428
  -445
  -462
  -480
  -500
  -519
Cash from operations, $m
  1,288
  1,595
  2,097
  2,709
  3,439
  4,296
  5,286
  6,411
  7,675
  9,077
  10,616
  12,230
  14,038
  15,975
  18,039
  20,227
  22,536
  24,964
  27,509
  30,171
  32,948
  35,843
  38,856
  41,991
  45,249
  48,634
  52,153
  55,809
  59,609
  63,560
  67,670
Maintenance CAPEX, $m
  0
  -449
  -616
  -825
  -1,082
  -1,390
  -1,753
  -2,174
  -2,655
  -3,197
  -3,800
  -4,464
  -5,188
  -5,972
  -6,814
  -7,712
  -8,666
  -9,674
  -10,734
  -11,848
  -13,013
  -14,229
  -15,498
  -16,819
  -18,193
  -19,622
  -21,107
  -22,650
  -24,254
  -25,921
  -27,654
New CAPEX, $m
  -1,206
  -4,160
  -5,213
  -6,389
  -7,672
  -9,044
  -10,484
  -11,972
  -13,488
  -15,014
  -16,534
  -18,037
  -19,514
  -20,959
  -22,370
  -23,747
  -25,094
  -26,416
  -27,718
  -29,008
  -30,295
  -31,586
  -32,891
  -34,219
  -35,578
  -36,978
  -38,427
  -39,933
  -41,504
  -43,148
  -44,872
Cash from investing activities, $m
  -1,212
  -4,609
  -5,829
  -7,214
  -8,754
  -10,434
  -12,237
  -14,146
  -16,143
  -18,211
  -20,334
  -22,501
  -24,702
  -26,931
  -29,184
  -31,459
  -33,760
  -36,090
  -38,452
  -40,856
  -43,308
  -45,815
  -48,389
  -51,038
  -53,771
  -56,600
  -59,534
  -62,583
  -65,758
  -69,069
  -72,526
Free cash flow, $m
  76
  -3,014
  -3,732
  -4,506
  -5,315
  -6,138
  -6,952
  -7,735
  -8,469
  -9,134
  -9,718
  -10,271
  -10,664
  -10,955
  -11,144
  -11,232
  -11,224
  -11,126
  -10,943
  -10,685
  -10,359
  -9,972
  -9,532
  -9,047
  -8,523
  -7,966
  -7,381
  -6,774
  -6,149
  -5,508
  -4,856
Issuance/(repayment) of debt, $m
  98
  2,369
  2,985
  3,659
  4,393
  5,179
  6,004
  6,856
  7,724
  8,598
  9,469
  10,329
  11,175
  12,002
  12,810
  13,599
  14,371
  15,127
  15,873
  16,612
  17,349
  18,088
  18,835
  19,596
  20,374
  21,176
  22,006
  22,868
  23,768
  24,709
  25,697
Issuance/(repurchase) of shares, $m
  792
  3,331
  4,075
  4,875
  5,713
  6,567
  7,414
  8,231
  8,999
  9,699
  10,317
  10,679
  11,106
  11,430
  11,650
  11,770
  11,792
  11,724
  11,571
  11,342
  11,045
  10,687
  10,277
  9,822
  9,328
  8,803
  8,251
  7,678
  7,088
  6,485
  5,872
Cash from financing (excl. dividends), $m  
  140
  5,700
  7,060
  8,534
  10,106
  11,746
  13,418
  15,087
  16,723
  18,297
  19,786
  21,008
  22,281
  23,432
  24,460
  25,369
  26,163
  26,851
  27,444
  27,954
  28,394
  28,775
  29,112
  29,418
  29,702
  29,979
  30,257
  30,546
  30,856
  31,194
  31,569
Total cash flow (excl. dividends), $m
  216
  2,685
  3,328
  4,028
  4,792
  5,608
  6,466
  7,352
  8,254
  9,162
  10,068
  10,738
  11,617
  12,477
  13,317
  14,137
  14,939
  15,725
  16,501
  17,269
  18,034
  18,803
  19,580
  20,371
  21,180
  22,013
  22,876
  23,772
  24,708
  25,686
  26,713
Retained Cash Flow (-), $m
  -1,438
  -4,037
  -5,061
  -6,203
  -7,449
  -8,781
  -10,179
  -11,624
  -13,096
  -14,577
  -16,053
  -17,512
  -18,946
  -20,349
  -21,719
  -23,056
  -24,364
  -25,647
  -26,911
  -28,164
  -29,413
  -30,667
  -31,934
  -33,223
  -34,543
  -35,902
  -37,309
  -38,771
  -40,296
  -41,892
  -43,566
Prev. year cash balance distribution, $m
 
  234
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -1,118
  -1,734
  -2,175
  -2,657
  -3,172
  -3,713
  -4,272
  -4,842
  -5,415
  -5,986
  -6,775
  -7,329
  -7,872
  -8,402
  -8,919
  -9,425
  -9,922
  -10,411
  -10,895
  -11,379
  -11,864
  -12,354
  -12,853
  -13,363
  -13,889
  -14,433
  -14,999
  -15,589
  -16,206
  -16,854
Discount rate, %
 
  6.40
  6.72
  7.06
  7.41
  7.78
  8.17
  8.58
  9.01
  9.46
  9.93
  10.42
  10.95
  11.49
  12.07
  12.67
  13.31
  13.97
  14.67
  15.40
  16.17
  16.98
  17.83
  18.72
  19.66
  20.64
  21.67
  22.76
  23.89
  25.09
  26.34
PV of cash for distribution, $m
 
  -1,051
  -1,522
  -1,773
  -1,996
  -2,181
  -2,318
  -2,402
  -2,429
  -2,401
  -2,323
  -2,276
  -2,107
  -1,914
  -1,705
  -1,490
  -1,277
  -1,074
  -886
  -716
  -568
  -440
  -334
  -248
  -180
  -127
  -88
  -59
  -39
  -25
  -15
Current shareholders' claim on cash, %
  100
  78.0
  62.4
  51.0
  42.4
  36.0
  31.0
  27.1
  24.0
  21.5
  19.5
  17.9
  16.6
  15.4
  14.5
  13.7
  13.0
  12.5
  12.0
  11.5
  11.2
  10.9
  10.6
  10.4
  10.2
  10.0
  9.9
  9.7
  9.6
  9.5
  9.5

MPLX LP owns, operates, develops, and acquires midstream energy infrastructure assets. The company engages in gathering, processing, and transportation of natural gas; the gathering, transportation, fractionation, storage, and marketing of natural gas liquids; and the gathering, transportation, and storage of crude oil and refined petroleum products. As of December 31, 2015, the company’s assets included approximately 2,900 miles of crude oil and refined product pipelines across 9 states. It also holds a 100% interest in butane cavern located in Neal, West Virginia with approximately 1,000 thousand barrels of storage capacity. In addition, the company operates crude oil and product pipelines owned by third parties. MPLX GP LLC acts as the general partner of MPLX LP. The company was founded in 2012 and is based in Findlay, Ohio.

FINANCIAL RATIOS  of  MPLX (MPLX)

Valuation Ratios
P/E Ratio 46.3
Price to Sales 4.6
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 9.2
Price to Free Cash Flow 144.4
Growth Rates
Sales Growth Rate 169.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 318.8%
Cap. Spend. - 3 Yr. Gr. Rate 62.3%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 48.9%
Total Debt to Equity 48.9%
Interest Coverage 2
Management Effectiveness
Return On Assets 2.8%
Ret/ On Assets - 3 Yr. Avg. 5.3%
Return On Total Capital 1.6%
Ret/ On T. Cap. - 3 Yr. Avg. 6.2%
Return On Equity 2.5%
Return On Equity - 3 Yr. Avg. 9.8%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 54.8%
Gross Margin - 3 Yr. Avg. 55.8%
EBITDA Margin 38.8%
EBITDA Margin - 3 Yr. Avg. 39.9%
Operating Margin 19.6%
Oper. Margin - 3 Yr. Avg. 28%
Pre-Tax Margin 9.5%
Pre-Tax Margin - 3 Yr. Avg. 22.7%
Net Profit Margin 9.9%
Net Profit Margin - 3 Yr. Avg. 19.3%
Effective Tax Rate -4.9%
Eff/ Tax Rate - 3 Yr. Avg. -1.5%
Payout Ratio 9.8%

MPLX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MPLX stock intrinsic value calculation we used $2589 million for the last fiscal year's total revenue generated by MPLX. The default revenue input number comes from 2016 income statement of MPLX. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MPLX stock valuation model: a) initial revenue growth rate of 37.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.4%, whose default value for MPLX is calculated based on our internal credit rating of MPLX, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of MPLX.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MPLX stock the variable cost ratio is equal to 69%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for MPLX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4% for MPLX.

Corporate tax rate of 27% is the nominal tax rate for MPLX. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MPLX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MPLX are equal to 431.9%.

Life of production assets of 24.9 years is the average useful life of capital assets used in MPLX operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MPLX is equal to -5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $11092 million for MPLX - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 368.49 million for MPLX is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of MPLX at the current share price and the inputted number of shares is $12.1 billion.

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COMPANY NEWS

▶ What Drove Antero Midstreams Strong 2Q17 Earnings Growth?   [Aug-10-17 01:34PM  Market Realist]
▶ Can MPLX LP Gain Momentum after 2Q17 Earnings?   [Aug-02-17 07:39AM  Market Realist]
▶ MLP Earnings: Wrap-Up for Last Week   [Aug-01-17 05:05PM  Market Realist]
▶ BP plc (ADR) (BP) Stock: Is MLP Spinoff a Pipe Dream?   [Jul-31-17 05:05PM  InvestorPlace]
▶ Hershey Co (HSY) Leads 8 Dividend Increases This Week   [Jul-28-17 02:37PM  InvestorPlace]
▶ Investor Network: MPLX LP to Host Earnings Call   [Jul-27-17 09:30AM  ACCESSWIRE]
▶ MPLX LP increases quarterly distribution   [Jul-26-17 04:42PM  GlobeNewswire]
▶ ETFs with exposure to MPLX LP : July 24, 2017   [Jul-24-17 05:23PM  Capital Cube]
▶ BP plc (ADR) (BP) Could Make a Big Income Announcement   [Jul-19-17 12:55PM  InvestorPlace]
▶ ETE, WPZ, MPLX: Last Weeks Key MLP Rating Changes   [Jul-17-17 04:05PM  Market Realist]
▶ ETFs with exposure to MPLX LP : July 14, 2017   [Jul-14-17 03:40PM  Capital Cube]
▶ MPLX LP Value Analysis (NYSE:MPLX) : June 29, 2017   [Jun-29-17 03:45PM  Capital Cube]
▶ MLPs with Top Upside Potential after May 2017   [Jun-08-17 07:36AM  Market Realist]
▶ MPLX LP to present at MLPA 2017 Investor Conference   [May-25-17 10:03AM  GlobeNewswire]
▶ ETFs with exposure to MPLX LP : May 16, 2017   [May-16-17 12:56PM  Capital Cube]
▶ Sohn Investment Conference 2017: Live Blog   [May-09-17 09:37AM  Investopedia]
▶ ETFs with exposure to MPLX LP : May 5, 2017   [May-05-17 04:20PM  Capital Cube]
▶ MPLX LP increases quarterly distribution   [Apr-26-17 01:24PM  GlobeNewswire]
▶ MLPs with the Maximum Potential Upside after 1Q17   [Apr-06-17 02:36PM  Market Realist]
▶ MPLX LP files 2016 Form 10-K   [Feb-24-17 03:02PM  GlobeNewswire]
▶ MPLX LP subsidiary to purchase Ozark Pipeline   [Feb-13-17 07:18AM  GlobeNewswire]
▶ MPLX LP announces senior notes offering   [08:51AM  GlobeNewswire]
▶ MPLX LP increases quarterly distribution   [Jan-25-17 03:30PM  GlobeNewswire]
Stock chart of MPLX Financial statements of MPLX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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