📉 Resilient Trader Trade Idea: The Middle East Fuel Play on Murphy USA (MUSA)

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Resilient Trader is where smart traders come for vetted ideas.

Every week, we cut through the noise and surface opportunities that institutions are already eyeing - but with strategies tailored for retail traders. Today's setup? A boring fuel retailer sitting in the sweet spot of a Middle East energy shock - and the market hasn't priced it in yet.

We’ll cover:

• Why Murphy USA is a Buy at current levels

• How to take advantage with a defined-risk call spread

🔍 Trade Thesis: MUSA Is the Quiet Beneficiary of the Middle East Energy Shock

Murphy USA (MUSA) sells gasoline next to Walmart stores across 27 states. That boring business model is suddenly sitting in near-ideal conditions.

Behind the scenes:

⛽ Gas prices jumped 11 cents overnight to $3.11 - the largest single-day move in years, driven by Middle East supply disruptions and tanker route closures

🏭 MUSA sources fuel from Midcontinent domestic production - insulated from the Middle East supply disruption while still capturing the pump price surge on the demand side

📊 MUSA's traffic model is price-competitive by design - when prices spike, consumers flock to the cheapest gallon in town, and MUSA's Walmart-adjacent low-price positioning wins that traffic every time

📊 The Fundamentals Are Solid

Let’s break it down:

💰 Revenue (FY 2025): $19.38B - high-volume, low-margin fuel business by design

📈 Net Income (FY 2025): $470.6M, or $24.10 per diluted share

🔧 Adjusted EBITDA (FY 2025): $1.019B - up from $1.007B in FY 2024

⛽ Fuel Margin (Q4 2025): 31.0 cpg - up 7.3% year-over-year, strongest quarter of the year

🛒 Merchandise Contribution: $869M, up 4.2% YoY at 20.2% unit margins

🏗️ New Stores: 51 opened in 2025, exceeding the 50-store target; 45-55 planned for 2026

💵 Share Buybacks: $652M repurchased in 2025 at avg $424.28/share; $2B program authorized through 2030

💸 Dividend: $2.52/share annualized - an 18.9% increase declared in late 2025

📐 Valuation Is Attractive

MUSA is priced for pessimism - and that's exactly where we want to buy:

⚖️ P/E Ratio (TTM): 17.2x - below the Specialty Retail industry average of 20x

📊 EV/EBITDA: 10.2x vs. Casey's General Stores (CASY) at 18x

💲 Price/Sales: 0.39x - deeply discounted vs. CASY at 1.2x

📉 Price/EBIT: 10.8x vs. CASY at 23.1x - MUSA trades at less than half the multiple of its closest peer

🎯 Intrinsic Value (DCF Base Case): $478.50 - 13% upside from current levels

🎯 Analyst Consensus Target: $457.50 - 10 analysts, high target of $500

🧭 Technicals: Recovering From Oversold Territory

✅ Current Price: $414.83 - trading above the 200-day moving average

❌ 52-Week Range: $345.23 – $523.09 - stock is down 20% from its highs

✅ Trend: Bottomed at $345.23 in August 2025; up 8% in the last 5 days on Middle East catalyst

🎯 Key Resistance: $422, $430, $441

🛡️ Key Support: $404, $394, $386

📊 Implied Volatility: 36.79% (71st percentile) - elevated IV makes selling the upper call even more attractive

💥 Trade of the Week: Defined-Risk Bull Call Spread

We're combining a long equity position with a defined-risk options trade for leveraged upside.

🟢 Trade Setup

• Buy MUSA at $414.83(as of last nights close)

🛡️ Options Play

Buy the Dec 18th $450/$540 Call Spread for $27.00

• Buy Dec 18th $450 Call: $44.00

• Sell Dec 18th $540 Call: $17.00

• Net debit: $27.00

📈 Risk-Reward

• Max Risk: $27.00 per spread ($2,700 per contract)

• Max Reward: $63.00 per spread ($90 spread width minus $27 debit)

• Breakeven: $477.00 (stock must be above $477 at expiration)

• Risk-Reward Ratio: 1:2.3

• Max Return on Risk: +233% if MUSA trades to $540 or above

• At 52-Week High ($523): Spread worth $73 - a +171% return on your $27 investment

Why a spread instead of just buying the call? Buying the $450 call outright costs $44. By selling the $540 call for $17, you cut your cost by 38% to just $27 - and with elevated IV at the 71st percentile, you're collecting rich premium on the short leg. The $540 cap is well above MUSA's recent highs and represents a realistic full-recovery target.

🛑 Risk Management Tip

Set a stop-loss at $385 (just below 3rd support) to cap downside at 7% on the equity position. The spread already has built-in risk management - your maximum loss is the $27 debit, period.

🚀 Catalysts on the Horizon

Keep your eyes on:

1. Middle East Energy Escalation - Gas already up 11 cents overnight; further disruption means further margin expansion

2. Q1 2026 Earnings (May 6) - First quarter under new CEO Mindy West; fuel margin data is the key metric

3. Buyback Acceleration - $1.35B+ remaining in the $2B program; management bought at $424 in 2025 - they know it's cheap

4. New Store Openings - 2 stores open in 2026, 18 under construction; execution drives volume growth

5. Raymond James Conference (March 2026) - CEO presenting; any bullish margin commentary could be a near-term catalyst

🧠 Final Thoughts

MUSA is a textbook case of a high-quality business getting punished for macro factors that are about to reverse in its favor.

Rising pump prices, a proprietary domestic supply chain, high-volume Walmart-adjacent locations, and a management team aggressively buying back stock at these prices - this is a near-ideal setup. The stock is down 20% from its highs while generating over $1 billion in annual EBITDA.

✅ Buy $MUSA ( ▲ 1.18% )  at $414.83
💸 Buy the Dec 18th $450/$540 Call Spread for $27.00

We'll be watching this one closely.

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