- Western Refining (WNR +2.8%) is upgraded to Buy from Neutral with a $41 target price, up from $34, at UBS, which sees material upside to its upwardly revised sum-of-the-parts derived price target.
- UBS views yesterday's announcement that WNR acquired the general partner interest in Northern Tier (NYSE:NTI) as a clear endorsement by management of the variable MLP structure.
- Variable MLP refiners NTI and CVR Refining trade at 6.7x and 7.8x normalized EV/EBITDA multiples, the firm says, well above the 4.3x average multiple of the c-corp coverage universe and WNR's 3.3x; as such, it's not a matter of if but when before WNR ultimately contributes its El Paso and Gallup refinery to NTI's existing variable MLP structure.