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Credit Suisse Says There Are Temporary Issues At These 4 Refiners

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Credit Suisse Says There Are Temporary Issues At These 4 Refiners

In a report published Tuesday, Credit Suisse analyst Edward Westlake commented on four independent refiners ahead of their respective first quarter earnings reports.

Overall, Westlake noted macro conditions has "built up steam" in the quarter, allowing companies with limited maintenance issues to beat estimates. However, Phillips 66 (NYSE: PSX), Valero Energy Corporation (NYSE: VLO) and Tesoro Corporation (NYSE: TSO) suffered more than most from maintenance downtime.

Westlake said that PBF Energy Inc (NYSE: PBF) could also fall short of earnings expectations in the first quarter as Toledo product margins were weak in January and February and waterborne crude discounts have tightened since February.

As a whole, total EBITDA for the U.S. Refiners group could be within 2 percent of the above market forecasts with some reporting 8 percent consensus estimates. Westlake singled out PBF Energy and Phillips 66 as potentially falling short of the average consensus.

"Under-estimating the maintenance impacts in 1Q and 4Q maintenance season can happen from time to time but does not impact our medium estimate," Westlake wrote. "We prefer to invest in the longer term potential rather than current earnings Don't Invest in Supercontango, But Do Invest."

Related Link: Bank Of America Slashes S&P 500's Earnings Estimates

Analyst Ratings And Changes

  • Shares of Phillips 66 remain Outperform rated with an unchanged $100 price target.
  • Shares of Valero Energy remain Outperform rated with an unchanged $75 price target.
  • Shares of Tesoro remain Outperform rated with an unchanged $125 price target.
  • Shares of PBF Energy remain Outperform rated with a price target lowered to $39 from a previous $40.

Latest Ratings for VLO

DateFirmActionFromTo
Apr 2021Raymond JamesUpgradesOutperformStrong Buy
Apr 2021Credit SuisseMaintainsOutperform
Apr 2021Tudor PickeringUpgradesHoldBuy

View More Analyst Ratings for VLO
View the Latest Analyst Ratings

 

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