Should Investors Buy MUSA as Strong Growth Meets a Premium Valuation?

MUSA’s Earnings Momentum Supports the Bull Case

Second-quarter 2026 earnings of $11.27 per share topped the Zacks Consensus Estimate of $9.40 by 19.9% and rose 53.1% year over year. Revenues of $6.81 billion also surpassed the consensus mark by 15.3%.

The Zacks Consensus Estimate for 2026 earnings is $36.53 per share and has moved 3.9% higher in the past four weeks, supporting favorable near-term profit expectations.

Fuel and Nicotine Strengthen MUSA’s Core Model

Murphy USA’s high-volume, low-cost model benefits from Walmart-adjacent locations and fuel-supply capabilities that provide a lower-cost source for roughly 50%-60% of retail volume. Second-quarter retail fuel margin increased to 35.1 cents per gallon from 29.2 cents a year earlier, while same-store fuel volumes rose 0.5%.

Image Source: Murphy USA Inc.

Nicotine adds another driver. Same-store nicotine sales and margins increased 2.4% and 4.6%, respectively, while nicotine-pouch unit volume more than doubled. Cigarette market share gained 50 basis points.

MUSA’s Growth Plan Requires Heavy Capital

Management expects new-store additions to finish closer to 45 in 2026, with 37 stores under construction after June 30. Murphy USA is also pulling forward work on 2027 openings and investing in its land pipeline to support more than 50 stores annually over time.

Capital expenditures are expected near the high end of the $475-$525 million range, while share repurchases remain a major capital-allocation lever. New stores take about three years to reach full ramp, making execution and cash generation central to the growth case.

Valuation Makes the MUSA Trade-Off More Complex

MUSA trades at 9.91X trailing 12-month EV/EBITDA, above the Zacks sub-industry’s 5.32X, the Zacks sector’s 6X and its five-year median of 9.3X. That premium leaves less room for disappointment if fuel margins normalize or growth slows.

Image Source: Zacks Investment Research

Casey’s General Stores, Inc. CASY operates a large convenience-store network combining fuel with grocery and prepared-food sales, making it a useful industry comparison. Valvoline Inc. VVV, a retail automotive-services company with more than 2,000 service centers, offers another reference point for capital-driven retail growth.

What Could Change the Case for MUSA

Better-than-expected fuel margins, sustained nicotine share gains and successful new-store ramping would strengthen the investment case. Management used a 35-cents-per-gallon all-in fuel-margin assumption for the second half after first-half margins averaged 37.9 cents.

Same-store non-nicotine sales fell 1.4% in the second quarter, and management expects full-year merchandise contribution near the low end of its $890-$900 million range. Long-term debt stood at about $2.17 billion at June 30, while competition continues to pressure volumes in Colorado and Florida.

MUSA’s Factor Scores Favor Quality Over Urgency

MUSA’s operating and estimate trends support a constructive view, but valuation and execution demands argue against chasing the shares. The stock currently carries a Zacks Rank #3 (Hold), a rating that can be appropriate for investors already holding the stock while waiting for a more attractive entry point.

The stock also has a VGM Score of A, Growth Score of A, Momentum Score of A and Value Score of B. These grades indicate favorable growth and momentum characteristics with solid value attributes, but Style Scores complement the Zacks Rank rather than replace it. The combination supports quality without signaling urgency. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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