UPDATE: Morgan Stanley Downgrades PBF Energy to Equal-Weight, Lowers PT on Earnings Overhangs

In a report published Monday, Morgan Stanley analyst Evan Calio downgraded the rating on PBF Energy PBF from Overweight to Equal-Weight, and lowered the price target to $28.00. In the report, Morgan Stanley noted, “One-third of PBF's refining capacity is in the feedstock-advantaged Mid-Con region, which benefits from a Brent-WTI spread and WCS diffs. PBF has highly complex East Coast refineries equipped with coking facilities, capable of processing all grades of heavy-sour crudes. With its rail transport facility, PBF should deliver Bakken crude to the East Coast at ~$12/bbl by YE, or $2-3/bbl below other East Coast refiners. Excellent management team with track-record of growing through successful refinery acquisitions. Higher RIN prices a headwind. We estimate PBF's 2013 RIN obligation at ~$225MM at current RIN prices. If D6 prices double from here, PBF's RIN obligation for 2013e could increase to ~$450MM.” PBF Energy closed on Friday at $22.77.