Murphy USA: Iran War Benefits Reflected In The Rally (Downgrade)

Seeking Profits5.36K FollowersFollow5ShareSavePlay(8min)CommentsSummaryMurphy USA is downgraded to 'Hold' as the recent rally brings shares to fair value, with an 8% long-term return profile.MUSA benefits from increased fuel price volatility due to the Iran war, which should boost fuel margins by at least 1.5cpg in H1 2026.Despite store growth, MUSA faces headwinds from declining fuel volumes, competitive pressures, and weaker discretionary spending impacting merchandise margins.Capital returns remain robust, with ongoing buybacks yielding sub-5% and leverage at a comfortable 2x, but no compelling upside until a pullback below $450. JHVEPhoto/iStock Editorial via Getty Images While up 5% over the past year, it has been a rollercoaster ride in shares of Murphy USA (MUSA). The stock struggled in H2 of 2025 as investors were concerned about weaker discretionary spending and muted fuel margins. However, the warThis article was written bySeeking Profits5.36K FollowersFollowOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.