Is MUSA a good stock to buy? We came across a bullish thesis on Murphy USA Inc. on Jorgen’s Substack. In this article, we will summarize the bulls’ thesis on MUSA. Murphy USA Inc.’s share was trading at $560.75 as of July 2nd. MUSA’s trailing and forward P/E were 19.44 and 20.20 respectively according to Yahoo Finance.
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Murphy USA is a leading U.S. low-cost fuel and convenience retailer positioned for compounding through fuel economics, store expansion, and disciplined capital returns. Earlier in 2026, CEO Mindy West highlighted expectations of a low-price, low-volatility fuel environment with continued competitive pressure, which was expected to cap near-term retail margin expansion. Following weak guidance and an initial selloff, the narrative has shifted as renewed fuel price volatility improved near-term earnings visibility and investor sentiment.
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Fuel, which contributes more than half of gross profits, benefits directly from volatility, with margins historically around ~30 cents per gallon in normal periods and spiking near ~40 cents per gallon in volatile environments, creating significant gross profit leverage and scaling across 1,800 stores that enhances sourcing flexibility and traffic. The company’s scale advantage versus smaller operators, and alignment with larger peers, supports a gradual long-term upward bias in fuel margins over time.
Inside the stores, merchandise performance remains stable, with nicotine driving traffic, while Murphy is actively shifting toward higher-margin food and beverage categories through larger New-To-Industry store formats. Management plans ~50 new stores annually, each generating ~12–16% cash-on-cash returns, contributing roughly $35–40 million EBITDA per 50-store cohort at maturity, with stores maturing over ~3 years.
Capital allocation remains anchored in a 50/50 framework, with consistent buybacks reducing share count by ~8% annually, creating a durable earnings per share tailwind. At ~11x forward EBITDA, valuation appears reasonable versus expectations of ~$1.2–1.3 billion mid-term EBITDA, implying steady growth and potential rerating. Overall, Murphy USA offers a resilient compounding model where fuel volatility, store expansion, and buybacks collectively support mid-teens per-share growth and meaningful upside rerating potential over time.
Previously, we covered a bullish thesis on Casey’s General Stores, Inc. (CASY) by Two Natural Capital in May 2025, which highlighted its rural dominance, food-first strategy, and acquisition-led expansion into prepared foods, positioning it as a differentiated convenience retailer. CASY’s stock has appreciated by approximately 71.13% since our coverage. Jorgen shares a similar view but emphasizes Murphy USA’s fuel volatility, scale advantages, and disciplined buyback-driven capital allocation, contrasting with Casey’s food-led compounding model.
Murphy USA Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held MUSA at the end of the first quarter which was 39 in the previous quarter. While we acknowledge the risk and potential of MUSA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MUSA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
