Intrinsic value of MPLX - MPLX

Previous Close

$36.11

  Intrinsic Value

$5.58

stock screener

  Rating & Target

str. sell

-85%

Previous close

$36.11

 
Intrinsic value

$5.58

 
Up/down potential

-85%

 
Rating

str. sell

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 14.3

 

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
  31.20
  28.58
  26.22
  24.10
  22.19
  20.47
  18.92
  17.53
  16.28
  15.15
  14.14
  13.22
  12.40
  11.66
  10.99
  10.39
  9.85
  9.37
  8.93
  8.54
  8.19
  7.87
  7.58
  7.32
  7.09
  6.88
  6.69
  6.52
  6.37
  6.23
Revenue, $m
  2,589
  3,397
  4,368
  5,513
  6,841
  8,360
  10,071
  11,977
  14,076
  16,368
  18,847
  21,511
  24,356
  27,376
  30,568
  33,928
  37,455
  41,146
  45,001
  49,021
  53,207
  57,562
  62,090
  66,796
  71,687
  76,770
  82,052
  87,544
  93,255
  99,196
  105,380
Variable operating expenses, $m
 
  2,274
  2,859
  3,550
  4,352
  5,268
  6,300
  7,450
  8,716
  10,099
  11,595
  12,978
  14,693
  16,515
  18,441
  20,468
  22,596
  24,823
  27,148
  29,573
  32,099
  34,726
  37,458
  40,297
  43,248
  46,314
  49,501
  52,814
  56,259
  59,844
  63,575
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
  2,274
  2,859
  3,550
  4,352
  5,268
  6,300
  7,450
  8,716
  10,099
  11,595
  12,978
  14,693
  16,515
  18,441
  20,468
  22,596
  24,823
  27,148
  29,573
  32,099
  34,726
  37,458
  40,297
  43,248
  46,314
  49,501
  52,814
  56,259
  59,844
  63,575
Operating income, $m
  507
  1,123
  1,508
  1,963
  2,490
  3,092
  3,771
  4,527
  5,360
  6,269
  7,252
  8,534
  9,662
  10,860
  12,127
  13,460
  14,859
  16,323
  17,852
  19,447
  21,108
  22,835
  24,632
  26,499
  28,439
  30,456
  32,551
  34,730
  36,995
  39,352
  41,806
EBITDA, $m
  1,053
  1,937
  2,490
  3,143
  3,901
  4,766
  5,742
  6,829
  8,026
  9,332
  10,746
  12,265
  13,887
  15,609
  17,429
  19,345
  21,355
  23,460
  25,658
  27,950
  30,337
  32,820
  35,402
  38,085
  40,874
  43,772
  46,784
  49,915
  53,171
  56,558
  60,084
Interest expense (income), $m
  212
  217
  296
  392
  506
  637
  787
  957
  1,145
  1,353
  1,579
  1,825
  2,088
  2,370
  2,669
  2,984
  3,317
  3,666
  4,031
  4,412
  4,810
  5,224
  5,655
  6,103
  6,569
  7,052
  7,555
  8,078
  8,621
  9,186
  9,774
Earnings before tax, $m
  246
  906
  1,212
  1,570
  1,984
  2,455
  2,983
  3,570
  4,215
  4,916
  5,673
  6,709
  7,574
  8,490
  9,458
  10,475
  11,542
  12,657
  13,822
  15,035
  16,298
  17,611
  18,977
  20,396
  21,871
  23,403
  24,996
  26,652
  28,374
  30,166
  32,032
Tax expense, $m
  -12
  245
  327
  424
  536
  663
  806
  964
  1,138
  1,327
  1,532
  1,811
  2,045
  2,292
  2,554
  2,828
  3,116
  3,417
  3,732
  4,059
  4,400
  4,755
  5,124
  5,507
  5,905
  6,319
  6,749
  7,196
  7,661
  8,145
  8,649
Net income, $m
  256
  661
  885
  1,146
  1,448
  1,792
  2,178
  2,606
  3,077
  3,589
  4,141
  4,898
  5,529
  6,198
  6,904
  7,647
  8,426
  9,240
  10,090
  10,975
  11,897
  12,856
  13,853
  14,889
  15,966
  17,084
  18,247
  19,456
  20,713
  22,021
  23,383

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
  22,645
  29,117
  36,752
  45,609
  55,730
  67,138
  79,844
  93,841
  109,117
  125,649
  143,409
  162,371
  182,504
  203,784
  226,187
  249,698
  274,305
  300,006
  326,804
  354,711
  383,745
  413,933
  445,310
  477,916
  511,799
  547,016
  583,626
  621,699
  661,309
  702,535
Adjusted assets (=assets-cash), $m
  17,275
  22,645
  29,117
  36,752
  45,609
  55,730
  67,138
  79,844
  93,841
  109,117
  125,649
  143,409
  162,371
  182,504
  203,784
  226,187
  249,698
  274,305
  300,006
  326,804
  354,711
  383,745
  413,933
  445,310
  477,916
  511,799
  547,016
  583,626
  621,699
  661,309
  702,535
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
  14,671
  18,864
  23,810
  29,548
  36,105
  43,496
  51,727
  60,795
  70,691
  81,401
  92,908
  105,192
  118,235
  132,021
  146,535
  161,767
  177,709
  194,359
  211,720
  229,799
  248,609
  268,167
  288,494
  309,618
  331,569
  354,384
  378,102
  402,768
  428,429
  455,137
Working capital, $m
  105
  -170
  -218
  -276
  -342
  -418
  -504
  -599
  -704
  -818
  -942
  -1,076
  -1,218
  -1,369
  -1,528
  -1,696
  -1,873
  -2,057
  -2,250
  -2,451
  -2,660
  -2,878
  -3,104
  -3,340
  -3,584
  -3,838
  -4,103
  -4,377
  -4,663
  -4,960
  -5,269
Total debt, $m
  5,422
  7,406
  9,807
  12,640
  15,926
  19,681
  23,913
  28,627
  33,820
  39,487
  45,621
  52,210
  59,245
  66,714
  74,609
  82,920
  91,643
  100,772
  110,307
  120,249
  130,603
  141,374
  152,574
  164,215
  176,312
  188,883
  201,948
  215,530
  229,655
  244,351
  259,646
Total liabilities, $m
  6,417
  8,401
  10,802
  13,635
  16,921
  20,676
  24,908
  29,622
  34,815
  40,482
  46,616
  53,205
  60,240
  67,709
  75,604
  83,915
  92,638
  101,767
  111,302
  121,244
  131,598
  142,369
  153,569
  165,210
  177,307
  189,878
  202,943
  216,525
  230,650
  245,346
  260,641
Total equity, $m
  11,092
  14,244
  18,315
  23,117
  28,688
  35,054
  42,230
  50,222
  59,026
  68,635
  79,033
  90,205
  102,131
  114,795
  128,180
  142,272
  157,060
  172,538
  188,704
  205,560
  223,113
  241,375
  260,364
  280,100
  300,609
  321,922
  344,073
  367,101
  391,049
  415,963
  441,895
Total liabilities and equity, $m
  17,509
  22,645
  29,117
  36,752
  45,609
  55,730
  67,138
  79,844
  93,841
  109,117
  125,649
  143,410
  162,371
  182,504
  203,784
  226,187
  249,698
  274,305
  300,006
  326,804
  354,711
  383,744
  413,933
  445,310
  477,916
  511,800
  547,016
  583,626
  621,699
  661,309
  702,536
Debt-to-equity ratio
  0.489
  0.520
  0.540
  0.550
  0.560
  0.560
  0.570
  0.570
  0.570
  0.580
  0.580
  0.580
  0.580
  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
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
  661
  885
  1,146
  1,448
  1,792
  2,178
  2,606
  3,077
  3,589
  4,141
  4,898
  5,529
  6,198
  6,904
  7,647
  8,426
  9,240
  10,090
  10,975
  11,897
  12,856
  13,853
  14,889
  15,966
  17,084
  18,247
  19,456
  20,713
  22,021
  23,383
Depreciation, amort., depletion, $m
  546
  814
  982
  1,181
  1,411
  1,674
  1,971
  2,302
  2,666
  3,064
  3,494
  3,731
  4,225
  4,748
  5,302
  5,885
  6,497
  7,137
  7,806
  8,503
  9,229
  9,984
  10,770
  11,586
  12,434
  13,316
  14,232
  15,185
  16,175
  17,206
  18,279
Funds from operations, $m
  1,349
  1,475
  1,867
  2,327
  2,859
  3,466
  4,149
  4,908
  5,743
  6,652
  7,635
  8,629
  9,753
  10,946
  12,206
  13,532
  14,922
  16,377
  17,895
  19,478
  21,126
  22,841
  24,623
  26,475
  28,400
  30,400
  32,479
  34,641
  36,889
  39,227
  41,662
Change in working capital, $m
  61
  -40
  -49
  -57
  -66
  -76
  -86
  -95
  -105
  -115
  -124
  -133
  -142
  -151
  -160
  -168
  -176
  -185
  -193
  -201
  -209
  -218
  -226
  -235
  -245
  -254
  -264
  -275
  -286
  -297
  -309
Cash from operations, $m
  1,288
  1,516
  1,915
  2,384
  2,926
  3,542
  4,235
  5,003
  5,848
  6,767
  7,759
  8,762
  9,896
  11,097
  12,366
  13,700
  15,099
  16,561
  18,088
  19,679
  21,336
  23,058
  24,849
  26,711
  28,645
  30,654
  32,743
  34,915
  37,174
  39,524
  41,971
Maintenance CAPEX, $m
  0
  -449
  -589
  -758
  -956
  -1,187
  -1,450
  -1,747
  -2,077
  -2,442
  -2,839
  -3,269
  -3,731
  -4,225
  -4,748
  -5,302
  -5,885
  -6,497
  -7,137
  -7,806
  -8,503
  -9,229
  -9,984
  -10,770
  -11,586
  -12,434
  -13,316
  -14,232
  -15,185
  -16,175
  -17,206
New CAPEX, $m
  -1,206
  -3,489
  -4,193
  -4,946
  -5,738
  -6,557
  -7,391
  -8,231
  -9,068
  -9,896
  -10,710
  -11,506
  -12,284
  -13,043
  -13,786
  -14,514
  -15,231
  -15,942
  -16,650
  -17,361
  -18,079
  -18,810
  -19,558
  -20,327
  -21,124
  -21,952
  -22,815
  -23,718
  -24,666
  -25,661
  -26,708
Cash from investing activities, $m
  -1,212
  -3,938
  -4,782
  -5,704
  -6,694
  -7,744
  -8,841
  -9,978
  -11,145
  -12,338
  -13,549
  -14,775
  -16,015
  -17,268
  -18,534
  -19,816
  -21,116
  -22,439
  -23,787
  -25,167
  -26,582
  -28,039
  -29,542
  -31,097
  -32,710
  -34,386
  -36,131
  -37,950
  -39,851
  -41,836
  -43,914
Free cash flow, $m
  76
  -2,423
  -2,867
  -3,320
  -3,768
  -4,201
  -4,606
  -4,974
  -5,298
  -5,571
  -5,790
  -6,013
  -6,120
  -6,171
  -6,168
  -6,116
  -6,018
  -5,877
  -5,699
  -5,487
  -5,247
  -4,980
  -4,693
  -4,386
  -4,065
  -3,732
  -3,388
  -3,035
  -2,676
  -2,312
  -1,944
Issuance/(repayment) of debt, $m
  98
  1,984
  2,401
  2,833
  3,286
  3,755
  4,233
  4,714
  5,193
  5,667
  6,133
  6,589
  7,035
  7,469
  7,895
  8,312
  8,722
  9,129
  9,535
  9,942
  10,353
  10,772
  11,200
  11,641
  12,097
  12,571
  13,065
  13,583
  14,125
  14,695
  15,295
Issuance/(repurchase) of shares, $m
  792
  2,724
  3,186
  3,656
  4,123
  4,574
  4,998
  5,385
  5,728
  6,020
  6,257
  6,274
  6,398
  6,466
  6,480
  6,445
  6,363
  6,238
  6,076
  5,881
  5,656
  5,406
  5,135
  4,847
  4,544
  4,229
  3,904
  3,572
  3,235
  2,893
  2,548
Cash from financing (excl. dividends), $m  
  140
  4,708
  5,587
  6,489
  7,409
  8,329
  9,231
  10,099
  10,921
  11,687
  12,390
  12,863
  13,433
  13,935
  14,375
  14,757
  15,085
  15,367
  15,611
  15,823
  16,009
  16,178
  16,335
  16,488
  16,641
  16,800
  16,969
  17,155
  17,360
  17,588
  17,843
Total cash flow (excl. dividends), $m
  216
  2,286
  2,721
  3,169
  3,640
  4,128
  4,624
  5,124
  5,623
  6,116
  6,600
  6,850
  7,313
  7,765
  8,207
  8,640
  9,067
  9,490
  9,912
  10,335
  10,763
  11,198
  11,643
  12,101
  12,575
  13,068
  13,582
  14,120
  14,684
  15,276
  15,900
Retained Cash Flow (-), $m
  -1,438
  -3,386
  -4,071
  -4,802
  -5,571
  -6,366
  -7,176
  -7,992
  -8,805
  -9,608
  -10,398
  -11,172
  -11,927
  -12,664
  -13,385
  -14,092
  -14,788
  -15,478
  -16,166
  -16,856
  -17,553
  -18,262
  -18,988
  -19,736
  -20,509
  -21,313
  -22,151
  -23,028
  -23,948
  -24,914
  -25,931
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
 
  -866
  -1,350
  -1,633
  -1,931
  -2,238
  -2,552
  -2,867
  -3,182
  -3,493
  -3,798
  -4,322
  -4,614
  -4,899
  -5,178
  -5,451
  -5,721
  -5,988
  -6,254
  -6,521
  -6,791
  -7,065
  -7,346
  -7,635
  -7,934
  -8,245
  -8,569
  -8,909
  -9,264
  -9,638
  -10,032
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
 
  -814
  -1,186
  -1,331
  -1,451
  -1,539
  -1,593
  -1,612
  -1,596
  -1,549
  -1,474
  -1,452
  -1,327
  -1,191
  -1,051
  -911
  -775
  -648
  -532
  -429
  -339
  -262
  -199
  -147
  -107
  -76
  -52
  -35
  -23
  -15
  -9
Current shareholders' claim on cash, %
  100
  83.7
  71.4
  61.8
  54.3
  48.3
  43.5
  39.6
  36.4
  33.7
  31.5
  29.7
  28.1
  26.8
  25.7
  24.7
  23.9
  23.2
  22.6
  22.0
  21.6
  21.2
  20.8
  20.5
  20.3
  20.1
  19.9
  19.7
  19.6
  19.5
  19.4

MPLX LP is a master limited partnership (MLP) formed by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. The Company is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of natural gas liquids (NGLs), and the gathering, transportation and storage of crude oil and refined petroleum products. Its segments are Logistics and Storage (L&S), and Gathering and Processing (G&P). The L&S segment includes transportation and storage of crude oil, refined products and other hydrocarbon-based products. As of December 31, 2016, the G&P segment operated various natural gas gathering systems that had a combined 5,439 million cubic feet per day (mmcf/d) throughput capacity. As of December 31, 2016, its assets included infrastructure to support MPC, including approximately 2,900 miles of crude oil and refined product pipelines across nine states.

FINANCIAL RATIOS  of  MPLX (MPLX)

Valuation Ratios
P/E Ratio 50.9
Price to Sales 5
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 10.1
Price to Free Cash Flow 159
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 31.2% 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 396.481 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 $14.3 billion.

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SXE Southcross Ene 1.70 1.80  hold
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PAGP Plains GP Hold 21.29 62.69  str.buy

COMPANY NEWS

▶ MPLX Getting Closer To Key Technical Benchmark   [03:00AM  Investor's Business Daily]
▶ 3 Stocks the World's Best Investors Are Buying Right Now   [Nov-17-17 10:23AM  Motley Fool]
▶ Reading the Top Institutional Holders in MPLX   [09:02AM  Market Realist]
▶ ETFs with exposure to MPLX LP : November 16, 2017   [Nov-16-17 11:50AM  Capital Cube]
▶ Marathon Runs Out Of Upside, UBS Downgrades   [Nov-15-17 12:11PM  Benzinga]
▶ Why 3Q17 Was Good for MLPs   [Nov-10-17 02:29PM  Market Realist]
▶ MPLX LP Value Analysis (NYSE:MPLX) : October 31, 2017   [Oct-31-17 12:16PM  Capital Cube]
▶ Wall Street Analysts Are Bullish on MPLX   [Oct-30-17 10:33AM  Market Realist]
▶ MPLXs 3Q17 Earnings Rose on Higher Volumes   [07:35AM  Market Realist]
▶ Marathon Petroleum Q3 Earnings: Getting Back on Track   [Oct-27-17 02:03PM  Motley Fool]
▶ MPLX LP to Host Earnings Call   [08:15AM  ACCESSWIRE]
▶ Capline Operator to Conduct Reversal Open Season   [Oct-17-17 08:54AM  GlobeNewswire]
▶ Understanding MPLXs 5th Position in the Top 7 MLPs   [Oct-03-17 01:37PM  Market Realist]
▶ ETFs with exposure to MPLX LP : September 27, 2017   [Sep-27-17 10:34AM  Capital Cube]
▶ Why High Leverage Is Not a Concern for MPLX   [Sep-25-17 04:08PM  Market Realist]
▶ 3 High-Yield Stocks You Won't Want to Overlook   [Sep-24-17 12:47PM  Motley Fool]
▶ 6 MLPs With Sustainable Yields of 6% or More   [Sep-07-17 04:11PM  Barrons.com]
▶ Morgan Stanley Added Major Position in MPLX in 2Q17   [Aug-30-17 02:36PM  Market Realist]
▶ MPLX LP Value Analysis (NYSE:MPLX) : August 23, 2017   [Aug-23-17 05:45PM  Capital Cube]
▶ 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]
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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