Murphy USA: The Fuel Retail Overhaul

There is a stock sitting on Zacks top value tracking lists this morning with intense early volume, a freshly upgraded Strong Buy rating, and a 26.6% upward revision in its 2026 earnings consensus over just the last 60 days. The trailing P/E is 19.83. The Consumer Discretionary sector average sits at 30.97. That gap does not stay open forever.

That stock is Murphy USA Inc. (MUSA).

What Just Happened

Q1 2026 results came in hard. Murphy USA posted EPS of $7.28 against a consensus estimate of $5.37 — a 35.57% earnings surprise. That compares to just $2.63 per share in the same quarter a year ago. Revenue for the quarter hit $4.82 billion, surpassing estimates by nearly 4%. The company has now beaten consensus EPS estimates in each of the last four quarters.

Following those results, the 2026 full-year consensus estimate climbed from $25.52 per share to $32.32. That is a 26.6% revision in 60 days. The 2027 estimate moved up too, from $27.33 to $29.56. Analysts are not just nudging numbers. They are rethinking the earnings power of this business.

What the Business Actually Does

Murphy USA operates over 1,700 gas stations and convenience stores, most of them anchored next to Walmart locations. That real estate strategy is not accidental. It drives consistent foot traffic from price-sensitive shoppers who are already in the parking lot. The company sells fuel at tight margins but high volume, then captures the higher-margin merchandise and nicotine sales inside the store. It is a simple model. It just works.

Slight tangent, but worth noting: Murphy Drive Rewards membership grew 11% in Q1 and QuickChek Rewards was up 30%. That loyalty data matters more than most people give it credit for. Repeat visits are the whole game in convenience retail, and those numbers suggest the traffic base is deepening, not eroding.

The Numbers Worth Watching

• Trailing P/E: 19.83 vs. Consumer Discretionary sector average of 30.97
• Forward P/E: 20.62
• 2026 EPS consensus: $32.32 (revised up from $25.52 over 60 days)
• Q1 2026 EPS: $7.28 vs. $2.63 year-ago (+177% YoY)
• Q1 2026 revenue: $4.82 billion, beat estimates by ~4%
• TTM revenue: $17.3 billion at a price-to-sales of just 0.55x
• EBITDA: $1.14 billion, EBITDA margin 5.26%
• Return on equity (TTM): 80.34%
• New store target: 45 to 55 openings in 2026
• New 2022/2023 store class: outperforming chain average by nearly 20% in fuel gallons and 40% in merchandise margin

That return on equity figure is not a typo. 80.34% is a number you expect from a software company, not a gas station operator. It reflects the capital efficiency of a business that does not need to own expensive real estate to run high-volume locations.

Is It Cheap?

The trailing multiple of 19.83x is already below the Specialty Retail industry average of 20.5x. Against the broader Consumer Discretionary sector at 30.97x, the discount is substantial. And that trailing figure does not yet reflect the full weight of the revised 2026 estimates. On a forward basis, the stock is being priced for a business growing at a slower pace than the one management just reported.

The stock is up 36.2% over the past three months and has returned 44.8% year to date. Some of that earnings revision is already in the price. That is the honest version of this analysis. But the multiple compression argument still holds: a company with 80%+ ROE, four straight beats, and a major upward estimate cycle does not typically stay at 19x for long.

Bull / Base / Bear

• Bull: Fuel supply margins normalize in H2 2026 as management projected, new store economics continue to outperform, and the multiple expands toward the sector average. $32 EPS at even 23x gets you a very different stock price.
• Base: Earnings come in near the revised $32.32 estimate, merchandise contribution keeps growing at low single digits, and the stock grinds higher with the broader market.
• Bear: Fuel margins compress again, product supply and wholesale economics disappoint a second time, and the recent estimate spike proves too optimistic. The stock gave back ground in late 2025 when that exact scenario played out.

Cheap Investor Scorecard

• Trailing P/E below sector average: YES (19.83 vs. 30.97)
• EPS estimate revision trend: STRONGLY POSITIVE (+26.6% in 60 days)
• Consecutive earnings beats: YES (4 of 4 quarters)
• Loyalty / traffic growth: YES (Drive Rewards +11%, QuickChek +30%)
• New store pipeline active: YES (45 to 55 openings guided for 2026)
• New store outperformance vs. chain: YES (+40% merchandise margin)
• Return on equity above 50%: YES (80.34%)
• Price-to-sales under 1x: YES (0.55x)
• Zacks rank upgrade: YES (Strong Buy, top 5% of covered stocks)
• Balance sheet leverage manageable: WATCH (total leverage ratio 1.96x as of Q1 2025)

Bottom Line

If fuel supply economics hold into the back half of 2026 and the new store class keeps delivering, Murphy USA has a credible path to closing the gap between what it earns and what the market is willing to pay for it. The estimate cycle is fresh, the beat history is real, and the multiple is still far below where a business with these returns typically trades.

If fuel margins roll over again the way they did in early 2025, that $32 EPS number gets trimmed and the story gets messier. That is the risk. Watch the H2 fuel margin data closely before adding size.

The Cheap Investor