- PBF Energy (PBF -4.6%) is downgraded to Sell from Neutral with a $19 price target, cut from $23, while CVR Energy (CVI +5.3%) is upgraded to Neutral from Sell with a $15 target, raised from $13, at Goldman Sachs.
- In cutting PBF to Sell, Goldman foresees negative free cash flow generation, reflecting ~6% 2016-18 free cash flow yield that translates to a long-term dividend reduction; the firm also cites downside to guidance at the Chalmette and Torrance refining assets, higher RINs exposure, and tough conditions in the U.S. east coast refining market.
- Goldman thinks CVR shares are due to stabilize after a tightening of Brent-WTI differentials and an increase in RIN- and ethanol-related expenses.