Marathon Petroleum Corporation has sold its Speedway convenience-store chain for $21 billion to retailer 7-Eleven. The petroleum firm plans to use the proceeds to buy back shares and pay debts. The American fuel company whose operations include oil refining. It decided to sell Speedway as part of a restructuring plan.
Maryann Mannen, CFO of Marathon Petroleum Corporation said that the plan to close the Speedway transaction marks a significant milestone in our ongoing commitment to strengthen the competitive position of our portfolio. After paying taxes tied to the transaction, it will retain $16.5 billion in cash. The American Fuel company plans to use up to $7.1 billion to fund stock repurchase. It includes the $2.9 billion remaining from the previous repurchase plan, the company is now set to buy back up to $10 billion of its stock.
After announcing the closing of the Speedway convenience sale and expanding the repurchase plan, Raymond James analyst Justin Jenkins assigned a Buy rating to the stock. Jenkins added that this will position the petroleum corporation to offer substantial upside to the cash return story over the next few years.The consensus among analysts on Wall Street is a Strong Buy based on 9 Buy ratings. The average analyst price target of $70.71 implies a 17.69% upside potential over current levels. The petroleum firm scores a 9 out of 10 on TipRanks’ Smart Score rating system, implying the stock is likely to outperform the market.