Entering text into the input field will update the search result below

PBF Energy's Share Price No Longer Mirrors Its Outlook

Mar. 05, 2018 12:01 PM ETPBF Energy Inc. (PBF)
Tristan R. Brown profile picture
Tristan R. Brown


  • Merchant refiner PBF Energy's share price has declined in 2018 to date amid broader market turmoil following a terrific second half to 2017.
  • While energy market volatility and a declining Brent-WTI price differential hamper the company's immediate outlook, overall operating conditions are steadily improving.
  • RIN prices have fallen sharply in response to an intervention by the White House and government analysts are forecasting continued domestic petroleum production growth and strong refined fuels demand.
  • This article considers the valuation of PBF Energy's shares in light of these recent developments.

Investors in merchant refiner PBF Energy (NYSE:PBF) must be disappointed with how the company's share price has performed in 2018 thus far. It had a stellar 2017 as its share price gained 30% over the course of the year following dismal returns in 2016 and the first half of 2017 (see figure). The second half of 2017 was especially strong as hurricane damage to other firms' Gulf Coast refineries in August and September caused U.S. crack spreads to surge. This development was followed by a 33% decline to the price of the largest Renewable Identification Number [RIN] credit category in November and December, which further buoyed investors' spirits given PBF Energy's vast RIN expenditures in previous years. The company's share price welcomed the new year by breaking $37, falling only a bit short of its all-time high closing price of $41.75.

The first two months of 2018 have been a return to the volatility of previous years, though, unfortunately for PBF Energy's investors. The company's share price has declined by 15% in 2018 YTD as a strong YoY improvement to its Q4 earnings and a sharp decline to RIN prices has been unable to overcome broader market turmoil. This is especially apparent in the steady declines to the company's trailing and forward EV/EBITDA ratios (see figure), and the former is approaching lows not seen since late 2014.

The Q4 earnings report

PBF Energy's Q4 earnings report, which was released last month, presented a very positive quarter even as it was unable to repeat Q3's blockbuster results. Adjusted diluted EPS jumped from $0.54 to $2.14 YoY as revenue increased by 38% over the same period on higher refined product prices. Much of the EPS improvement was attributable to the implementation of 2017's tax reform legislation, although EPS

This article was written by

Tristan R. Brown profile picture
My articles do not represent investment advice. Readers should perform their due diligence before investing in any security or fund that is mentioned by my articles.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in PBF over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You


Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About PBF

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on PBF

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.