Wolfe Research Downgrades MPLX LP (MPLX) to Peerperform

Wolfe Research analyst Keith Stanley downgraded MPLX LP (NYSE: MPLX) from Outperform to Peerperform.

The analyst comments: “The stock offers an attractive 7% yield with plans to further increase the distribution by 12.5% in each of 4Q26 and 4Q27. We think this could help to set a yield floor on the stock around a 9% yield, and offer an attractive total return. However, we increasingly view the way that MPLX executes on this plan to be risky and highly dependent on acquisitions, particularly after disappointing growth in 2025-26. This could leave the company with a high yield, but also very low distribution coverage and a more levered balance sheet. Additionally, the rapid distribution growth plan is important to sponsor MPC, which could create a divergence of interests with MPLX LP holders. Overall, we prefer to stay on the sidelines pending better proof of execution on the plan and growth outlook.

We value MPLX using our SOTP EV/EBITDA framework where we set target multiples for each business based on its relative merits. For MPLX, we apply a 10.5x EBITDA multiple to the majority of the Crude Oil & Refining Logistics assets given very stable cash flows, partially offset by poor transparency on the duration and rates on contracts. We apply a lower 7.0x EBITDA multiple for Fuels Distribution given a lack of physical assets. For the Natural Gas & NGL Services segment, we apply a 9.0-9.5x multiple to EBITDA from Appalachia and Southwest (Permian and Oklahoma) which we see as strong incumbent positions. We value the Bakken G&P businesses at 7.5x EBITDA as we view it as a weaker long-term basin. Lastly, we value gas equity method investments at 11.5x EBITDA given strong contract profiles, partially offset by non-operated interests. Overall, this implies a fair value of $51/unit for MPLX.”

For an analyst ratings summary and ratings history on MPLX LP click here. For more ratings news on MPLX LP click here.

Shares of MPLX LP closed at $59.20 yesterday.

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