- Tesoro (TSO +0.3%) is upgraded to Buy from Neutral with a $92 price target at Citigroup following the recent pullback in the stock.
- Citi's Faisel Khan cautions that despite the growth in crack spreads, material headwinds remain for refiners due to higher RIN costs and increased gasoline inventories, but also notes that TSO obtains a meaningful part of its cash flows from its marketing and midstream assets, and that the value of these assets has “held up better than pure refining assets.”
- For Q2, Khan expects TSO to report a Q/Q improvement in margins, although significantly below prior estimates.