- Northern Tier Energy (NTI +0.4%) is initiated with an Outperform rating and $30 price target at RBC, which cites NTI's sole refinery - St. Paul Park - as "one of the most advantaged crude slates in the U.S.," mainly on account of its pipeline access to local Bakken and Canadian crudes.
- The firm considers NTI as undervalued because of a general lack of investor interest in the variable-rate MLP refiner structure, as well as the company's dependence on only one refinery.
- At the same time, RBC starts Western Refining (WNR +0.4%) at Sector Perform with a $48 target, saying WNR is caught between two opposing strategic directions - to purchase the remaining 62% of NTI or to sell its refineries to NTI; the uncertainty could be an overhang in the medium term.
- The firm praises WNR's impressive asset portfolio, which it says includes two of the most advantaged refineries in the U.S. and access to local growing crude supplies in the Permian and Four Corners Basins.