Thu, Feb. 26, 3:45 PM
- Western Refining (WNR +7.9%) is one of the day's strongest energy gainers after Q4 earnings came in well ahead of estimates, and its Western Refining Logistics (WNRL +2.9%) and 38%-owned Northern Tier Energy (NTI +5.3%) also delivered upbeat Q4 results (I, II).
- Cowen analyst Sam Margolin reiterates an Outperform rating and $60 price target on WNRL, encouraged by management's affirmation that the MLP’s growth remained on track, including a 50% target for third party revenues, with projects slated to begin as far out as 2018.
- WNRL’s share price has lagged by a wide margin YTD, weighing on WNR’s valuation, but WNR is nearing completion of the Tex-New Mex pipeline, while the Bobcat pipeline remains on schedule; including potential dropdowns from NTI, Margolin sees $100M WNRL EBITDA growth by early 2016.
Dec. 15, 2014, 12:33 PM
- BofA Merrill analyst Doug Leggate stays cautious on the refining sector for 2015, although he sees a bullish opportunity in Phillips 66 (PSX +0.5%), which he upgrades to Buy from Neutral with a $90 price target.
- The expected recognition of value risks being materially overhyped compared to what is currently being recognized by MLPs, the analyst says, adding that absence of guidance on the cost impact on the remaining business, limited guidance on tax and lack of precision on disclosure prompts skepticism that the market is not getting ahead of itself.
- Leggate downgrades HollyFrontier (HFC -1.5%) to Neutral from Buy, and PBF Energy (PBF -1.9%) and Delek US (DK -1.9%) to Underperform from Neutral; he also lowers stock price targets for the three, as well as for Valero (VLO +0.4%), Northern Tier (NTI -2.5%) and Marathon Petroleum (MPC -1.1%).
Jul. 7, 2014, 3:27 PM
- Western Refining (WNR +1.9%) is upgraded to Buy from Neutral with a $55 price target, raised from $43, at Citigroup, which sees a potential restructuring helping to unlock shareholder value.
- Citi believes WNR could restructure into a holding company with the limited and general partnership interests in Northern Tier Energy (NTI -0.9%) and Western Refining Logistics (WNRL -1.4%), which would allow WNR to generate a ~10% free cash flow yield over its forecast period.
Jun. 25, 2014, 10:18 AM
- Refiners take a beating in early trading, as a lift of the ban on U.S. oil exports is expected to narrow the WTI-Brent spread, which could cause refiners' profits drop if they are forced to pay higher prices to compete with international buyers for U.S. crude.
- “We don’t think the current system needs to be changed,” Valero Energy tells Bloomberg.
- Yesterday's rulings gave Pioneer Natural Resources (PXD +2.6%) and Enterprise Products Partners (EPD +1.4%) permission to ship ultralight oil to foreign buyers - a narrow ruling, but one that is likely to spark similar requests from other companies, and increase lobbying for a full lifting of the 40-year-old ban on exporting crude oil.
- Refining stocks are broadly lower: VLO -7.4%, PBF -5.8%, MPC -5.7%, WNR -5.5%, DK -5.4%, HFC -4.6%, ALDW -4.6%, TSO -3.8%, NTI -3.5%, PSX -2.9%, ALJ -2.7%, CVI -2.3%.
Mar. 10, 2014, 12:31 PM
- Barron's touted high-yield energy plays CVR Refining (CVRR +4.6%) and Northern Tier Energy (NTI +0.9%) over the weekend as looking attractive on a long-term perspective after both currently go for just 6x this year's projected earnings.
- Wall Street analysts estimate NTI will pay out 44% of its unit price in total over three years through 2016; for CVRR, estimated payments over three years work out to 37% of its recent price.
- Average analyst price targets suggest 13% upside for NTI over the next year and 19% for CVRR; add that to projected yields this year of 15% for each, and the result is potential for returns of more than 30%.
Dec. 31, 2013, 3:56 PM
- The energy sector - especially refiners - leads the stock market higher today even as crude oil trades lower, with Phillips 66 (PSX +3.2%) contributing to the strength after Berkshire Hathaway agreed to acquire its flow improver business (I, II).
- Berkshire's acquisition would seem to point to the next logical step for Warren Buffett’s empire building in the energy sector: investing in pipelines and, at the other end, the refineries that stand to benefit most from them.
- Today's refining stalwarts: VLO +3.7%, MPC +3.8%, HFC +2%, TSO +3.4%, WNR +3.1%, CVI +2.9%, ALJ +2.8%, NTI +2.8%.
Dec. 20, 2013, 3:18 PM
- Shrinking crude spreads - WTI has gained 7.2% while Brent has risen just 1.7% so far in December - likely will hold back refiners during the first six months of 2014, Cowen's Sam Margolin says.
- Extremely favorable refining conditions from last month are deteriorating amid higher utilization and continued reduction in crude imports, limiting supply and causing U.S. prices to melt higher, the firm explains, adding that investors need to "manage near-term expectations" while "remain(ing) constructive on the refining story for 2014."
- Margolin keeps Outperform ratings for Western Refining (WNR +4%), Marathon Petroleum (MPC +2.6%), Tesoro (TSO +0.4%), Valero (VLO +1.4%) and PBF Energy (PBF +1.7%); HollyFrontier (HFC +2.4%), Delek (DK +2.3%), Northern Tier (NTI +0.6%), Alon USA (ALJ +1.7%) and Calumet Specialty Products (CLMT +3.8%).
Dec. 11, 2013, 12:52 PM
- Tesoro (TSO -1.8%) apparently didn't offer enough good news at yesterday's analyst day, as shares tumble despite the general perception from the meeting as "incrementally positive."
- The key messages in the meeting surrounded progress of the synergy capture from the Carson acquisition, continued margin improvement through feedstock and product optimization and driving additional logistics growth.
- TSO sees rail unloading capacity along the U.S. west coast for North Dakota crude oil growing to nearly 1M bbl/day through 2015; TSO's $100M rail-to-barge project in Washington is the largest of the offloading projects announced so far.
- Imperial Capital raises its TSO price target TSO to $63 from $57, and Howard Weil lifts its target to $66 from $62.
- Other refiners are lower too: VLO -1.3%, PSX -0.7%, MPC -1.8%, WNR -2.6%, HFC -1.6%, ALJ -1%, NTI -0.2%, DK -1.9%, CLMT -2.7%.
Nov. 14, 2013, 10:07 AM
- Northern Tier Energy (NTI +4.8%) is upgraded to Outperform from Neutral at Macquarie, which adds to the chorus of praise for Western Refining's acquisition of a 38.7% stake in the company.
- The item that separates this upgrade from the others is the substantial increase in the price target for the stock - to $37 from $21.
Nov. 13, 2013, 12:42 PM
- 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 (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.
Nov. 12, 2013, 11:56 AM
- Goldman Sachs says Western Refining's (WNR +7.2%) move to acquire a 38.7% stake in Northern Tier Energy (NTI +1.1%) is good for both companies, reiterating Buy ratings.
- WNR gains access to NTI’s St. Paul Park refinery, which has direct access to cost-advantaged Bakken and Canadian crude oils, the firm says.
- For NTI, at a minimum the share overhang from its previous P-E owners is now eliminated; while awaiting more details on whether WNR plans to set up an MLP for its existing wholly-owned refineries, "the potential certainly exists for NTI to benefit from greater asset diversification while remaining a MidCon pure-play."
Nov. 12, 2013, 9:40 AM
- Northern Tier Energy (NTI +3.5%) confirms that its private equity sponsors have agreed to sell all of their interests in NTI, including those of the general partner, to Western Refining (WNR +9.3%) for $775M; WNR now owns 100% of the general partner and 38.7% of NTI. (earlier)
- WNR says the deal adds scale to its business and diversifies operations by adding a new geographic region to its refining platform.
Nov. 11, 2013, 6:19 PM
Oct. 11, 2013, 11:46 AM
- Refiners continue to rise a day after news of a leaked EPA proposal that would significantly scale back biofuel blending requirements next year.
- The EPA's rationale for a cut in the volume of ethanol that must be blended echoes an argument the oil industry has made for months: The U.S. fuel chain cannot absorb more ethanol.
- Let the lawsuits begin: "Any plan to roll back the targets... under the guise of addressing the blend wall would be patently unlawful," says the head of the Renewable Fuels Association.
- TSO +4.4%, VLO +3.4%, PSX +3.1%, MPC +2.2%, WNR +4.5%, HFC +2.2%, ALJ +6.8%, CVI +2.6%, NTI +2%, DK +7.8%, CLMT +1.8%.
Sep. 24, 2013, 12:26 PM
- Goldman Sachs is bullish on Bakken after it came away from a trip to North Dakota with greater confidence in its outlook that activity in the shale play should exceed expectations, citing producers and drillers who were "uniformly confident" in resource expansion, efficiency gains and potential for improving well performance in coming years.
- The firm sees production growth of 130K bbl/day to 210K bbl/day through 2016, above the average of 110K bbl/day for the six months up to this July.
- Buy-rated Oasis Petroleum (OAS +3.4%) and Continental Resources (CLR +3.3%) (earlier) are Goldman's favorites among Bakken-exposed oil E&P companies; also listed as ready to reap Bakken benefits are Northern Tier Energy (NTI +4%), Halliburton (HAL +0.7%), Enbridge (ENB +0.2%) and Canadian Pacific Railway (CP +0.6%).
Sep. 23, 2013, 3:27 PM
- Trading in Northern Tier Energy (NTI -7.5%) resumes after a brief halt.
- Shares had been weak all day in response to news of a fire yesterday at one of its crude oil units at its St. Paul Park, Minn., refinery, which accounts for 94% of NTI's operating income.
- NTI says preliminary estimates indicate the outage will last 3-4 weeks and repair costs should total less than $10M; updates Q3 throughput guidance to 78K-81K bbl/day from earlier 90K-95K bbl/day.
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