UPDATE: Credit Suisse Initiates CVR Refining LP at Neutral on Fair Valuation
Credit Suisse initiated CVR Refining LP (NASDAQ: CVRR) with a Buy rating and a $31.00 price target.
Credit Suisse noted, "While there is limited absolute upside potential to our current target, (i) the 15% NTM yield should still support the shares, (ii) we believe that CVRR could launch its own logistics MLP and (iii) were we to use $10/bbl WTI-Brent mid-cycle (instead of $8/bbl), there would be value up to $39/sh. That said, we are concerned about a potential narrowing of Mid-Con crude discounts in 2Q13. CVRR owns two refineries close to Cushing that should benefit from access to cheap WTI, from cheap Canadian crude, and from cheap Midland crude. The refineries have a good distillate yield (we are more bullish on distillate demand than gasoline), and CVRR is growing a higher multiple logistics business."
CVR Refining LP closed at $30.03 on Monday.
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