Download PDF

1. Company Snapshot

1.a. Company Description

Murphy USA Inc.engages in marketing of retail motor fuel products and convenience merchandise.The company operates retail stores under the Murphy USA, Murphy Express, and QuickChek brands.


As of December 31, 2021, it operated 1,679 retail gasoline stores principally in the Southeast, Southwest, and Midwest United States.The company was founded in 1996 and is headquartered in El Dorado, Arkansas.

Show Full description

1.b. Last Insights on MUSA

Murphy USA's recent performance has been positively driven by its Q4 earnings beat, with quarterly earnings of $7.53 per share exceeding the Zacks Consensus Estimate of $6.67 per share. The company's growth strategy, focusing on expanding larger format stores and leveraging geographic advantages, has potential for above-market fuel volume growth. Additionally, management targets $1.3 billion EBITDA by 2028, with substantial share buybacks potentially boosting annualized upside. Increased institutional investor holdings, such as by American Century Companies Inc. and Barclays PLC, also support the stock.

1.c. Company Highlights

2. Surpassing Expectations: A Deeper Dive into the Earnings Report

The company reported a strong financial performance, with actual EPS coming in at $7.53, significantly higher than the estimated $6.67. Revenue growth is expected to continue, with analysts estimating a 3.3% increase next year. The company's ability to surpass expectations is a testament to its effective management and strategic decision-making. As Mindy West noted, the company's focus on "everyday low price strategy, continuous improvement mindset, and capital allocation will remain unchanged," which has contributed to its success.

Publication Date: Feb -20

📋 Highlights
  • Competitive Pressure Strategy:: New entrants initially lower prices to gain share but raise them later, leading to higher margins for the company.
  • Maintenance Capital Efficiency:: Proactive investments reduced maintenance costs by $6–$8 million, enhancing operational uptime.
  • EBITDA Guidance Factors:: Long-term $1.2 billion target driven by new store programs and a normalized fuel environment with $35–$40M EBITDA per 50-store class at maturity.
  • Fuel Margin Stability:: Fuel margins projected at 30.5% CPG, benefiting from low volatility and customer price-insensitivity during low fuel prices.
  • Expense Growth Control:: Targeting <5% OpEx growth, with a focus on self-maintenance and overhead reduction to sustain 4% annual per-store expense growth.

Financial Highlights

The company's financial performance was robust, driven by higher margins and effective cost management. The EBITDA guidance of $1.2 billion is attributed to factors such as new store program timing and scale, and a normalized fuel environment. The company's ability to maintain below 5% OpEx growth is a notable achievement, with a right run rate for per-store expense growth expected to be around 4% over the next few years.

Valuation Metrics

To understand what's priced into the stock, we can look at various valuation metrics. The current P/E Ratio is 15.7, P/B Ratio is 11.85, and EV/EBITDA is 10.64. The company's ROE is 74.25%, indicating strong profitability. The Net Debt / EBITDA ratio is 3.22, suggesting a manageable debt burden. These metrics provide insight into the company's financial health and valuation.

Operational Updates

The company is focused on innovation to support its core business and drive growth. The QuickChek business is being refocused on fundamentals, with a simplified menu and rationalized assortment. New leadership at QuickChek is expected to speed up execution and spark innovation. The company's efforts to strengthen its core business while pursuing incremental sources of value are expected to drive long-term growth.

Growth Prospects

The company expects to see continued growth, driven by its new store program and strategic acquisitions. The recent tuck-in acquisition in Colorado added density to the market quickly and economically, and the company is looking to make similar acquisitions in the future. With 128 new stores expected in 2027, the company is poised for long-term growth and expansion.

3. NewsRoom

Card image cap

Murphy USA Inc. (NYSE:MUSA) Receives Consensus Recommendation of “Hold” from Analysts

Mar -28

Source: defenseworld.net

Card image cap

The 3 Safest Stocks to Buy Right Now

Mar -24

Source: fool.com

Card image cap

American Century Companies Inc. Acquires 3,614 Shares of Murphy USA Inc. $MUSA

Mar -09

Source: defenseworld.net

Card image cap

Barclays PLC Purchases 323,331 Shares of Murphy USA Inc. $MUSA

Mar -08

Source: defenseworld.net

Card image cap

Murphy USA Inc. (MUSA) Presents at 47th Annual Raymond James Institutional Investor Conference Transcript

Mar -02

Source: seekingalpha.com

Card image cap

Top 15 High-Growth Dividend Stocks For March 2026

Mar -02

Source: seekingalpha.com

Card image cap

Murphy USA SVP Sells $344k Worth of Shares

Mar -01

Source: fool.com

Card image cap

Murphy USA Inc. Announces Participation in Upcoming Conference

Feb -24

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.50%)

6. Segments

Marketing

Expected Growth: 5.5%

Murphy USA Inc.'s 5.5% marketing growth driven by increasing fuel efficiency, strategic partnerships, and effective loyalty programs. Additionally, the company's focus on digital transformation, including mobile payments and personalized offers, has enhanced customer experience and retention. Furthermore, Murphy USA's expansion into new markets and optimization of store layouts have contributed to the growth.

Corporate and Other Assets

Expected Growth: 4.5%

Murphy USA Inc.'s Corporate and Other Assets segment growth of 4.5% is driven by strategic investments in digital transformation, expansion of food and beverage offerings, and optimization of store layouts, resulting in increased foot traffic and higher average transaction values. Additionally, the company's focus on cost savings initiatives and effective inventory management have contributed to improved profitability.

7. Detailed Products

Fuel

Murphy USA Inc. operates a chain of retail fuel stations, offering a range of fuel products including gasoline, diesel, and alternative fuels.

Convenience Store Items

Murphy USA operates convenience stores, offering a variety of food, beverages, and other merchandise to customers.

Food and Beverage

Murphy USA offers a range of food and beverage options, including coffee, sandwiches, and snacks, through its convenience stores and restaurants.

Loyalty Programs

Murphy USA offers loyalty programs, such as the Murphy Drive Rewards program, to reward frequent customers and provide discounts and benefits.

Commercial Fueling

Murphy USA provides commercial fueling solutions for fleets and businesses, offering customized fuel management and logistics services.

8. Murphy USA Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Murphy USA Inc. faces moderate threat from substitutes, as customers have limited alternatives for fuel and convenience store products. However, the company's strong brand recognition and loyalty programs help mitigate this threat.

Bargaining Power Of Customers

Murphy USA Inc. has a large customer base, but individual customers have limited bargaining power due to the company's scale and market presence.

Bargaining Power Of Suppliers

Murphy USA Inc. relies on a few large suppliers for fuel and other products, giving them some bargaining power. However, the company's scale and diversification efforts help mitigate this risk.

Threat Of New Entrants

Murphy USA Inc. operates in a capital-intensive industry with high barriers to entry, making it difficult for new entrants to compete effectively.

Intensity Of Rivalry

Murphy USA Inc. operates in a highly competitive industry with many established players, leading to intense rivalry and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 67.30%
Debt Cost 3.95%
Equity Weight 32.70%
Equity Cost 7.82%
WACC 5.21%
Leverage 205.83%

11. Quality Control: Murphy USA Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
GPC

A-Score: 5.6/10

Value: 3.7

Growth: 5.1

Quality: 4.2

Yield: 6.0

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
Casey's General Stores

A-Score: 5.5/10

Value: 2.9

Growth: 7.0

Quality: 5.4

Yield: 0.0

Momentum: 9.0

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
Williams-Sonoma

A-Score: 5.3/10

Value: 3.3

Growth: 7.1

Quality: 7.5

Yield: 3.0

Momentum: 6.0

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
DICK'S Sporting Goods

A-Score: 5.3/10

Value: 4.0

Growth: 6.7

Quality: 4.7

Yield: 5.0

Momentum: 6.0

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
Academy Sports

A-Score: 4.7/10

Value: 7.1

Growth: 6.4

Quality: 5.6

Yield: 1.0

Momentum: 4.0

Volatility: 4.3

1-Year Total Return ->

View Full Report
Stock-Card
Murphy USA

A-Score: 4.0/10

Value: 3.9

Growth: 8.0

Quality: 4.1

Yield: 0.0

Momentum: 1.0

Volatility: 7.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

502.41$

Current Price

502.41$

Potential

-0.00%

Expected Cash-Flows