Bank of America Merrill Lynch Reiterates Neutral Rating, $51 PT on Tesoro Corporation
In a report published Wednesday, Bank of America Merrill Lynch reiterated its Neutral rating and $51.00 price target on Tesoro Corporation (NYSE: TSO).
BofA Merrill Lynch noted, “After an extended process to seek a buyer, Tesoro announced yesterday that it now plans to convert its 94kb/d Hawaii refinery to an import, storage and distribution terminal. The plant will cease refining operations in April, with TSO incurring a $1.00-1.10 per share non cash charge (~$140m ) in 4Q12 and with potential to realize $300mm - 350mm of cash due to lower working capital needs by year-end. The working capital release is slightly above initial expectations of $300mm while year-end timing is somewhat later. We had already modeled both the positive working capital benefits and did not include Hawaii in our 2013 estimates so our model is unchanged. From our discussions with management we do not expect TSO to drop the assets down to TLLP.”
Tesoro Corporation closed on Tuesday at $41.40.
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