Tesoro: Potential For Great Growth Not Worth The Risk
Nov. 14, 2013, 2:36 PM
- Refiners such as Marathon Petroleum (MPC +4.9%) and Valero (VLO +4%) are surging today, and Barron's Ben Levisohn says it’s all about the oil spread.
- While Brent crude has stayed steady for the last three months, trading at ~$109/bbl, WTI has dropped 12% to ~$94; the more expensive Brent is relative to WTI, the better it is for U.S. refiners.
- VLO, for example, has gained 17% during the past three months, and much of its price has followed the Brent-WTI spread.
- Also: PSX +2.1%, TSO +2.7%, HFC +3.2%, WNR +4.3%, ALJ +5.2%, ALDW +1.3%, CLMT +2.6%, CVI +1.3%.
Nov. 8, 2013, 12:38 PM
- The price of West Texas crude has dropped nearly 9% during the past month, and Credit Suisse thinks it’s time for investors to take another look at refiners, particularly Tesoro (TSO +1.2%).
- TSO's "Northern Mid-Con and Pacific North-West are among the best positioned in U.S. refining, with a decade of free cashflow ahead," the firm writes, adding that west coast results demonstrate TSO’s above average asset quality which Carson synergies will cement further.
- The firm upgrades Calumet Specialty Products (CLMT +1.8%) to Neutral from Underperform as "the themes which drove expected underperformance have now become more visible"; Western Refining (WNR +0.3%) and Delek US (DK -1%) are "interesting."
Nov. 7, 2013, 2:28 PM
- Tesoro (TSO +2.3%) is one of few energy companies gaining ground today, despite Q3 earnings that fell 77% Y/Y and came up short of analyst estimates.
- Gross margins in the quarter fell to $9.22/bbl vs. $19.67/bbl for the year-earlier period; a smaller discount on benchmark WTI crude relative to international crude also had an effect in the midcontinent.
- However, revenues jumped 41.5% to $11.24B from $7.94B a year ago, attributable to improved throughput and better performance by the retail segment.
- CEO Greg Goff says TSO remains focused on executing its strategic plan, citing improved refinery run rates which rose to 863K bbl/day vs. 548K a year ago; throughput volumes in California surged 114% Y/Y to 557K bbl/day.
Oct. 17, 2013, 5:42 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%.
Oct. 10, 2013, 2:18 PM
- Chevron (CVX -0.4%) is lower after warning "significantly lower" earnings from its refining division would send Q3 EPS down Q/Q.
- J.P. Morgan believes investors were anticipating relatively soft downstream results given the currently weak refining margin environment; perhaps that's why refiners are holding up very well today: VLO +4.4%, TSO +3.7%, PSX +2.3%, ALJ +6.7%, MPC +4.5%, WNR +3.7%, HFC +4.2%, CVI +4.6%.
- Citigroup worries about CVX's upstream business too; it was expecting a much larger increase in Q3 production which would put CVX on track to meet its full year guidance of 2,650M boe/day.
Oct. 7, 2013, 2:47 PM
- Refining stocks are lower as HollyFrontier (HFC -0.7%) is hit with a downgrade from Imperial Capital, which dropped its rating to In-Line from Outperform, reduces its price target to $41 from $49, and cuts its 2013 EPS estimate to $3.83 from $4.83 and 2014 EPS estimate to $3.50 from $4.00.
- The firm sees continued contraction in refining margins and crude price differentials, especially as the southern leg of the Keystone XL pipeline commences operation later this month.
- Other refiners: VLO -0.6%, TSO -0.8%, MPC -1.4%, PSX -1.5%, WNR -1.4%, ALJ -2.5%, CVI -2.5%.
Oct. 2, 2013, 3:26 PM
- It's a pretty good day for refiners, even as most energy stocks slip, as Phillips 66 (PSX +2.1%), Valero (VLO +1.2%), Tesoro (TSO +0.2%), Western Refining (WNR +1.2%), Marathon Petroleum (MPC +1.2%) and HollyFrontier (HFC +0.4%) all post gains.
- PSX rises the most among energy companies in the S&P 500 after announcing a 25% increase in its quarterly dividend, VLO and TSO are upgraded to Buy from Neutral at Citigroup (I, II), and WNR rolls out a 12.5M-share IPO of its logistics unit.
- Refiners generally have come in for criticism recently; Barclays, for one, believes most refiners will miss consensus earnings expectations by a wide margin, with VLO the exception.
- ETFs: IEO, IEZ, IYE, PXE, PXI, XES, XLE, XOP, VDE, RYE, FXN, OIH, PXJ, PSCE, ERX, DIG, ERY, DUG, DDG.
Sep. 9, 2013, 2:23 PM
- Refiners (PXE, RYE, IOIL) are broadly underperforming the rest of the energy sector today after a Simmons downgrade to Neutral from Overweight, expecting continuing challenges to EPS and refining margins in Q3 and into 2014 after a dismal Q2.
- Individual stocks lowered by the firm: Marathon Petroleum (MPC -1.5%), Tesoro (TSO -0.6%), Delek US (DK -1.3%), Alon USA (ALJ -0.5%), CVR Energy (CVI -1.8%), CVR Partners (CVRR -1.2%).
- HollyFrontier (HFC -1.8%) breaks down to fresh multi-week lows after a downgrade from Morgan Stanley.
- Also, Barclays says at its Energy-Power conference that it believes most refiners will miss current consensus expectations by a wide margin, with Valero (VLO +0.7%) the exception (Briefing.com).
Aug. 29, 2013, 12:44 PM
- With strikes on Syria no sure thing now, oil prices have fallen nearly 1% and taken oil stocks with them; in fact, energy (XLE -0.6%) and utilities (XLU -0.7%) are the only S&P sectors in the red.
- Among global producers: XOM -1.2%, CVX -0.7%, COP -0.6%, RDS.A -0.6%, BP -0.9%, TOT -1.6%.
- Notable decliners: CNX -2.4%, RRC -2.1%.
- Refiners are among energy stocks bucking the sector's downward trend: VLO +0.7%, TSO +0.9%, PSX +0.6%, MPC +0.8%, WNR +1.5%, HFC +2.3%, ALJ +2.9%.
Aug. 1, 2013, 5:00 PM
Jul. 23, 2013, 3:49 PMTesoro's (TSO +1.6%) proposal to build a 120K bbl/day crude-by-rail complex at the Port of Vancouver in Washington gains approval from the port’s board of commissioners. TSO's proposal comes amid increased scrutiny over crude-by-rail projects after a train hauling crude rolled from its parking spot earlier this month and crashed in Lac-Megantic, Quebec. | Comment!
Jul. 19, 2013, 2:07 PM"The spread is dead," Global Hunter proclaims, as WTI crude (USO) rises above Brent (BNO) for the first time in nearly three years two days after the EIA reported a third consecutive weekly supply decline. Some analysts say a WTI premium may be here to stay, supported by a relatively better outlook for the U.S. economy and falling stockpiles. Brent meanwhile, may struggle amid receding geopolitical risks and global macroeconomic weakness. Refiners: ALDW -0.34%, CVI -0.22%, TSO +1.64%, HFC + 3.29%, MPC +1.32%, NTI -0.41%, DK +3.36%. | 17 Comments
Jul. 16, 2013, 1:13 PMEnergy (XLE -1.1%) is the worst performing S&P sector today with refiners taking the biggest hit following Marathon Petroleum's (MPC -4.9%) profit warning, which came on the heels of Valero's (VLO -2%) warning a few days ago as higher oil prices alongside flattish product pricing isn't a great combination. Others: Phillips 66 (PSX -3.3%), Tesoro (TSO -2.6%). | Comment!
Jul. 12, 2013, 11:07 AMValero Energy (VLO +3.8%) has recouped early losses following a disappointing Q2 update and is making new highs for the day, as downside guidance apparently was priced in. Most refining peers also are higher: ALJ +3.7%, WNR +3.6%, HFC +3.5%, TSO +3.2%, CVI +2.9%, ALDW +2.6%, MPC +2.6%, PSX +2.5%, DK +1.8%, CVRR +1.7%, NTI +1.7%. | 9 Comments
Jul. 11, 2013, 6:18 PM
TSO vs. ETF Alternatives
Tesoro Corp is an independent petroleum refiner and marketer in the United States. Its subsidiaries, operating through three business segments, primarily transport crude oil and manufacture, transport and sell transportation fuels.
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