For Immediate Release
Chicago, IL – June 5, 2026 – Zacks Equity Research shares Marathon Petroleum MPC as the Bull of the Day and DAQO New Energy DQ as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Valero Energy Corp. VLO, Marathon Petroleum Corp. MPC and Phillips 66 PSX.
Here is a synopsis of all five stocks:
Bull of the Day:
Crude oil prices remain elevated, and despite a steady stream of headlines suggesting a diplomatic breakthrough between the United States and Iran, there is still little evidence that a lasting resolution is close at hand. In fact, tensions have continued to simmer this week following a deadly Iranian strike on an airport in Kuwait and renewed fighting across parts of the region. With multiple geopolitical flashpoints and key shipping routes still at risk, the outlook for energy prices remains firmly supported.
For investors, oil and gas stocks offer an attractive way to hedge against the possibility of further escalation. Beyond the geopolitical backdrop, the group's fundamentals have improved dramatically. Higher commodity prices have driven a wave of upward earnings revisions across the sector, while many leading companies continue to trade at reasonable valuations. At the same time, several of the industry's top names are displaying constructive momentum setups as they break out of multi-week consolidations.
One stock that stands out from both a fundamental and technical perspective is Marathon Petroleum.
Marathon Petroleum Shares Break Out
In one of the clearest signs of strength, Marathon Petroleum shares have broken decisively above a multi-week consolidation and are now trading at fresh record highs. As long as the stock can hold above that former resistance level, momentum suggests the path of least resistance remains higher.
Fundamentally, Marathon is well positioned to benefit from the current environment. As one of the world's largest independent refiners and marketers of petroleum products, the company stands to benefit from elevated energy prices, translating directly into higher profits. Those favorable conditions have already translated into substantial upward earnings revisions, with analysts dramatically increasing their profit forecasts over the past two months.
Perhaps most importantly, Marathon is displaying notable relative strength even against an already robust energy sector. When a stock outperforms one of the market's leading groups while simultaneously breaking to new highs, it is often a sign that institutional investors continue to accumulate shares and expect the trend to continue.
Earnings Estimates Nearly Double for MPC
The technical strength in Marathon Petroleum is being reinforced by a dramatic improvement in the company's fundamental outlook. Over the past 60 days, analysts have sharply increased their earnings projections, with estimates across the board surging enough to earn the stock a Zacks Rank #1 (Strong Buy).
Current consensus forecasts now call for Marathon to generate record annual earnings, surpassing the previous peak of $23.53 per share set during the energy price spike that followed the outbreak of the Russia-Ukraine war.
Even after its recent rally, Marathon remains attractively valued. Shares trade at just 8.9x forward earnings, while analysts project long-term EPS growth of 20.8% annually over the next three to five years. That combination of strong growth and a modest valuation gives the stock a compelling PEG ratio of just 0.43.
Should Investors Buy Shares in MPC?
Marathon Petroleum checks many of the boxes investors typically look for: strong earnings momentum, a reasonable valuation and a stock price confirming the improving fundamentals with a breakout to new highs.
Of course, energy stocks remain sensitive to geopolitical developments and the direction of crude oil prices. A sudden de-escalation in the Middle East could pressure the group in the short term. Though evidence suggests that even with a deescalation in the Middle East, oil prices could stay elevated for some time as the supply chain readjusts.
For investors looking for a combination of value, growth and momentum, MPC stands out as a compelling opportunity.
Bear of the Day:
The solar energy sector has quietly become one of the market's strongest performers this year, with many clean energy stocks staging impressive recoveries. Yet DAQO New Energy continues to trend lower, significantly underperforming both its peers and the broader market. Relative weakness during a period of sector strength is often an important warning sign for investors.
DAQO is one of the world's largest producers of high-purity polysilicon, the critical raw material used in the manufacturing of solar panels. While long-term global demand for solar energy remains robust, the company is heavily exposed to the economics of the polysilicon market, where conditions have deteriorated sharply over the past year.
Several factors continue to weigh on the stock. China, the dominant force in global solar manufacturing, has experienced a severe oversupply of polysilicon capacity, driving prices sharply lower and compressing profit margins across the industry.
At the same time, slowing sales growth, persistent weakness in the Chinese equity market, and a steady stream of downward earnings revisions have further undermined investor confidence. Analysts now expect the company to remain unprofitable, a dramatic reversal from the strong earnings power it demonstrated during the solar boom just a few years ago.
DQ Shares Drop on Earnings Downgrades
DAQO New Energy has experienced a very sharp boom-and-bust cycle over the past several years. Annual revenue peaked at roughly $4.6 billion in 2022 as polysilicon prices soared, but the combination of massive capacity expansion and weaker pricing has dramatically altered the landscape. Today, trailing 12-month revenue has fallen to just $568 million.
The earnings picture has deteriorated as well. Over the past 60 days, analysts have significantly reduced their profit forecasts, with consensus estimates now calling for substantial net losses both this year and next. Those persistent downward revisions have earned the stock a Zacks Rank #5 (Strong Sell) rating, reflecting the increasingly challenging fundamentals facing the company.
While the long-term outlook for solar energy remains compelling, the current oversupply in the polysilicon market continues to pressure pricing and profitability, leaving DAQO in a difficult position.
Should Investors Avoid DQ Stock?
While the long-term outlook for solar energy remains attractive, investors should remember that great industries do not always produce great stocks. DAQO remains caught in a difficult part of the cycle, with oversupply driving down polysilicon prices and earnings expectations continuing to deteriorate.
The combination of falling sales, projected losses, persistent earnings downgrades and relative weakness against an otherwise strong solar sector makes it difficult to build a bullish case for the shares today. Until fundamentals improve and analysts begin raising estimates again, investors would be better served looking elsewhere within the clean energy space.
Additional content:
Why High Oil Prices Won't Fully Derail VLO's Refining Strength
The Iran-war shock is driving the high crude oil prices, with the price of West Texas Intermediate (“WTI”) crude currently trading at more than the $90-per-barrel mark. The U.S. Energy Information Administration (“EIA”) in its latest short-term energy outlook projected WTI at $85.68 per barrel this year, higher than $65.40 last year. Thus, with oil prices likely to remain elevated, refiners like Valero Energy Corp. could see pressure on their overall business. However, that does not appear to be the case. Let’s delve deeper.
The global refining capacity is constrained, and fuel inventories are low. On the demand side, gasoline, diesel and jet fuel remain resilient. This means people are still driving and flying quite often, while diesel demand suggests transportation, freight, agriculture and industrial activity are still holding up. As a result, with busy refineries and fuel not in abundant supply, refining margins for refiners like VLO are quite strong.
Thus, surprisingly, with crude prices likely to remain high, investors shouldn’t allocate their money only to exploration and production companies but also to refining players like VLO, even though high crude prices have been increasing refiners’ input costs.
Will MPC & PSX Also Gain?
Marathon Petroleum Corp. and Phillips 66 are two other leading refining companies that are well poised to gain from the tight refining capacities across the globe.
MPC runs refining systems that are the largest in the United States. With high utilization of refineries, Marathon Petroleum is well-positioned to capture almost all of the available profitable opportunities.
Phillips 66’s refineries have excellent processing capacity and can handle different grades of crude, and hence can earn a handsome margin after processing low-cost heavy crude. Importantly, PSX expects its refining operations to be responsible for contributing almost 33% of its total adjusted EBITDA by 2027.
VLO’s Price Performance, Valuation & Estimates
Shares of VLO have gained 106.1% over the past year compared with the 61.5% improvement of the industry.
From a valuation standpoint, VLO trades at a trailing 12-month enterprise value to EBITDA of 7.95X. This is above the broader industry average of 5.95X.
The Zacks Consensus Estimate for VLO’s 2026 earnings has seen upward revisions over the past 30 days.
VLO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Valero Energy Corporation (VLO): Free Stock Analysis Report
Marathon Petroleum Corporation (MPC): Free Stock Analysis Report
Phillips 66 (PSX): Free Stock Analysis Report
DAQO New Energy Corp. (DQ): Free Stock Analysis Report
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