KeyBanc Capital Markets reiterated an Overweight rating on Murphy USA and kept its price target at $460.00, a level the firm says reflects stronger fuel margins and better customer traffic in the most recent quarter. At the currently reported share price of $422.51, that target implies nearly 9% upside to KeyBanc's view of fair value.
KeyBanc updated its fourth-quarter earnings-per-share estimate upward after fuel-margin checks showed cents-per-gallon between 30.7 and 31.1. Those readings sit about 1.9% to 3.2% above the consensus benchmark of 30.1 cents per gallon, according to the data referenced. The bank's margin checks indicated October was the peak month for margin strength, with moderation in November and December.
That revision to Q4 EPS follows analyst activity captured in the same dataset: three analysts have recently raised earnings expectations for the upcoming reporting period. Murphy USA's next scheduled earnings release is listed as February 4.
Fuel is a central driver of Murphy USA's profitability, accounting for roughly 60% of gross profit. Because of that mix, the company's earnings are highly sensitive to swings in cents-per-gallon. Management had previously noted October fuel margins tracking near 32.0 cents per gallon versus 27.0 cents per gallon in October of the prior year, highlighting month-to-month variability in per-gallon economics.
Operational metrics point to a low gross profit margin overall for the enterprise. The company operates with an aggregate gross margin of about 7.6%, underscoring dependence on volume and operating efficiency to drive returns. Despite the thin margin profile, the stock has shown notable appreciation, rising 17% over the last six months.
KeyBanc's geolocation-based traffic measures signal improving customer flows in the fourth quarter, with same-store traffic up 3.6% after a 1.6% decline in the third quarter. By month, the traffic data showed a 0.3% increase in October, a 4.4% increase in November, and a 6.4% jump in December. For the first quarter to date, KeyBanc reports cents-per-gallon are tracking between 26.0 and 27.0, and January 2025 margins were nearer to 24.0 cents per gallon. The firm noted that weather disruptions across the Southeast depressed same-store gallons by roughly 50 basis points in January, affecting the month-over-month read.
Investor attention to Murphy USA has prompted a range of responses from other brokerages. Stephens raised its price target to $475, attributing the move to stronger-than-expected retail fuel margins and continued momentum in the nicotine category inside stores. Wells Fargo lifted its target to $410 and anticipated a solid fourth quarter fueled by robust fuel results and consistent inside-store performance. Jefferies set a $405 target, citing potential upside to Q4 results based on modest gains in cents-per-gallon and traffic readings.
Not all broker views were bullish. BofA Securities initiated coverage with an Underperform rating and a $405 price target, referencing a 2027 estimated EV/EBITDA multiple of 8.6x, which the bank said lies below the company's long-term average. Separately, aggregated analyst price targets span a wide range, from a low of $340 to a high of $550 in the dataset cited, and Fair Value assessments in that dataset consider the shares slightly overvalued at present.
On the corporate governance front, the company disclosed an executive compensation change: Mindy K. West is slated to receive an annual base salary of $1,000,000 beginning January 1, 2026. Her package will include a target annual cash incentive and a long-term incentive award under the company’s 2023 Omnibus Incentive Plan.
Taken together, the analyst revisions, traffic and margin checks, and the range of broker price targets present a mix of supportive operational data and valuation debate for investors weighing Murphy USA. The company's heavy reliance on fuel gross profit, thin overall gross margin, and sensitivity to weather and traffic patterns are recurring themes in the assessments.