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Wednesday, Oct 2
Tesoro raised to Buy at Citi on California economic recovery
- Tesoro (TSO +0.6%) is upgraded to Buy from Neutral at Citigroup, which says the refiner should enjoy a boost from an economic recovery in California.
- TSO's new refinery in Carson City will double its capacity in the state; the firm notes that California's economic recovery thus far has been skewed toward the northern part of the state, where gasoline demand is much lower than in the southern part, but reserve capacities will shrink as the economic recovery spreads, boosting profits for TSO.
- However, profits will remain pressured through Q4 due to the seasonality of gasoline profits and demand; the firm lowers its price target on TSO shares to $55 from $60.