MPLX Nears 10-Year High On Trump Boost

As President Donald Trump's second term begins, his administration's energy policies, particularly its support for oil drilling, have had a significant impact on the stock performance and valuation of midstream energy companies like MPLX LP (NYSE: MPLX). In this article, we will explore how MPLX's strategic partnership with Marathon Petroleum Corporation (MPC) and its growth initiatives have contributed to its near-term 10-year high.

In his inaugural speech, President Trump laid out his plans to promote domestic oil production and reduce energy costs. This policy has benefited MPLX, a midstream energy company that owns and operates oil and gas pipelines, storage facilities, and processing plants. In 2023, MPLX's earnings increased by 0.45% to $3.81 billion, despite a decrease in revenue of -4.09% to $10.68 billion. This positive earnings growth can be attributed to the increased demand for oil and gas due to the Trump administration's energy policy.



Analysts have recognized the positive impact of the Trump administration's energy policy on MPLX's stock performance. According to 11 analysts, the average rating for MPLX stock is "Buy," with a 12-month stock price forecast of $49.09, which is a decrease of -5.37% from the latest price. This indicates that analysts expect MPLX's stock to perform well in the long term, despite the short-term decrease in revenue.

During Trump's presidency, MPLX has undertaken several projects and acquisitions that have contributed to its growth and near-term 10-year high. Some specific examples include:

1. Permian Basin Growth Strategy: In 2023, MPLX acquired its partner's interest in a G&P joint venture in the Permian Basin, advancing its growth strategy in the region. This acquisition allowed MPLX to increase its exposure to the growing Permian Basin market, which has seen significant production growth and is expected to continue to be a major driver of U.S. oil and gas production.
2. Preakness II Processing Plant: In 2024, MPLX's Preakness II processing plant began operations. This facility is designed to process natural gas and extract valuable NGLs (natural gas liquids), contributing to MPLX's growth in the midstream sector.
3. Increased Ownership in BANGL NGL Pipeline: In 2024, MPLX announced an increased ownership stake in the BANGL NGL pipeline. This pipeline is a critical infrastructure asset that transports NGLs from the Permian Basin to the Gulf Coast, where they can be further processed and exported. MPLX's increased ownership in this pipeline allows it to capture more of the value generated from the transportation of these valuable commodities.
4. FID of the Blackcomb Natural Gas Pipeline: In 2024, MPLX announced a final investment decision (FID) for the Blackcomb natural gas pipeline. This pipeline is expected to transport natural gas from the Marcellus and Utica shale basins to markets in the Northeast, further expanding MPLX's midstream infrastructure network.

These projects and acquisitions have contributed to MPLX's growth and near-term 10-year high by expanding its midstream infrastructure network, increasing its exposure to growing production basins, and allowing it to capture more value from the transportation and processing of energy commodities.

Under the Trump administration, MPLX's strategic partnership with Marathon Petroleum Corporation (MPC) has significantly influenced its financial performance and growth prospects. The partnership has allowed MPLX to leverage MPC's extensive refining and marketing network, providing it with a steady stream of crude oil and refined products to transport and store. This has resulted in increased throughputs and higher tariff rates for MPLX, contributing to its strong financial performance.

For instance, in the second quarter of 2024, MPLX's Logistics and Storage segment adjusted EBITDA increased by $107 million compared to the same period in 2023, primarily driven by higher rates and growth from equity affiliates, including MPC. This growth is a testament to the success of the partnership in enhancing MPLX's financial performance.

Moreover, the partnership has also enabled MPLX to expand its infrastructure and increase its takeaway capacity, further boosting its growth prospects. In 2023, MPLX announced a $1.1 billion capital spending outlook, which included investments in organic growth projects and acquisitions, such as the acquisition of a partner's interest in a G&P joint venture in the Permian basin. These investments, supported by the partnership with MPC, have positioned MPLX for continued growth and success under the Trump administration.

In conclusion, MPLX's strategic partnership with MPC and its growth initiatives have contributed to its near-term 10-year high under the Trump administration. The Trump administration's focus on domestic energy production and deregulation has further benefited MPLX, creating a favorable environment for its growth and financial performance. As MPLX continues to expand its midstream infrastructure network and increase its exposure to growing production basins, investors can expect the company to maintain its strong performance in the long term.