MPLX Earnings: Ongoing Volume Growth Offsets Lower Natural Gas Liquids Pricing

MPLX’s second-quarter earnings were a bit better than we expected, primarily due to strength in pipeline volumes and pricing. We attribute the strength of the volumes to ongoing demand recovery, particularly at Marathon Petroleum refineries, while the pricing is likely inflation-linked strength. Pipeline volumes increased 1% from last year’s levels and pricing increased 9%. Gathering and processing volumes remain largely consistent with our expectations, with relatively muted volumes and weak pricing due to lower realized natural gas liquids prices. After updating our model, our fair value increases to $38 per unit from $35, while our narrow moat rating remains unchanged.