UPDATE: Credit Suisse Initiates Coverage on Alon USA Energy with Neutral Rating, $17 PT

In a report published Wednesday, Credit Suisse Group initiated coverage on Alon USA Energy

with a Neutral rating and $17.00 price target. Credit Suisse noted, “We initiate on ALJ with a Neutral recommendation against a deeply undervalued peer group. Management is significantly improving the competitive positioning of the company (1) bringing cheap WTI-related crude to the light Krotz Springs refinery via pipe, (2) bringing Bakken crude to Bakersfield (if permits are granted) and (3) continued performance in ALJ's retail and asphalt marketing segments. Management has improved parent liquidity and has shone a spotlight on a key asset via the MLP formation with the Big Springs asset (ALDW). On our current assumptions, ALJ looks slightly undervalued ($17/sh target price), but less undervalued than c-corp peers. Our mid-cycle earnings estimates could prove conservative - we show inside potential upside towards $20/sh.” Alon USA Energy closed on Monday at $15.14.