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Oil Sector Outlook Remains Bullish With Refinery Stocks Leading: Consider PBF Energy

Apr. 10, 2023 5:20 PM ETPBF Energy Inc. (PBF)15 Comments
Alan Sumler profile picture
Alan Sumler


  • The price of crude oil is expected to increase through the summer due to demand and OPEC+ mandated production cuts.
  • Some analysts see crack spreads remaining elevated through 2023, thus benefiting the margins for refinery companies.
  • PBF Energy Inc., an oil refinery company, has reported historically high financial results for 2022 and a stable outlook for 2023.
  • PBF Energy’s stock price is trading near its all-time high and has increased 54% over the last year.
  • I rate PBF Energy as a strong buy and recommend a long-hold strategy for potential 20-25% growth.

Oil Refinary

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You might ask why a cannabis analyst is covering the energy sector. While cannabis markets are bearish, it is important to consider other sectors and their performance. The energy sector offers interesting opportunities through supply/demand cycles, while other sectors

This article was written by

Alan Sumler profile picture
Welcome to the home of The Cannabis Report: a monthly report on the cannabis industry. I am an analyst and consultant in the cannabis industry. I have contributed to High Times Magazine. I currently have a book out, Cannabis in the Ancient Greek and Roman World. I am most interested in technical stock analysis, option strategies, small cap strategies, and emerging markets. Feel free to contact me with any questions about the cannabis industry or publicly traded stocks in the cannabis industry.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of PBF either through stock ownership, options, or other derivatives. 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.

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Comments (15)

They are in California man!
I’ve owned PBF for about a year. I was attracted to it’s valuation in the 30’s and rich option premiums. Others have recently written that selling cash secured puts with out of money strikes is a good way to minimize risk of jumping in. Given the company’s share buy back and dividend programs, coupled with option premiums, I’m not averse to owning the shares and selling covered calls. It has been a volatile stock but I think it’s one of the refiners to own if you’re comfortable smoothing out the swings with options.
Danglinert profile picture
@richk98 Too much work for me. Have no idea what stock will do, but hoping the company can buy back stock a cheap rates.
Mike Moola profile picture
@Danglinert I'm in the same boat as you. Seems like too much work. I would just buy shares and hold the shares until it reaches the intrinsic price.
TopDog417 profile picture
All time high in the last year was $49 and it has a lot of woes in California now that California is pulling a EU tax on profits: California can begin regulating how much profit the state's oil refiners can earn on selling gasoline beginning this summer under a bill signed into law that oil companies rejected as likely to raise costs…Energy investment firm Tudor Pickering & Holt said this week that independent refiner PBF Energy has the largest single exposure in the California market with 32% of its refining capacity in the state.
Danglinert profile picture
@Topdog417 I think that any attempted caps on refinery profits will have the same impact as rent restrictions. They will further limit supply and this will cause the price to rise for consumers. Because we all know how rent restrictions have kept the lid on prices in San Francisco.

However, even San Francisco prices are falling now, because people are realizing that they can move. My big fear is that everyone will move out of CA and thus PBF's west coast refineries will lose value. Quite a conundrum.
CincinnatiRick profile picture
@Danglinert "My big fear is that everyone will move out of CA."

That's the fear of most rational people all across the country. Specifically, there is concern that the Governor apparently wants to move to Washington DC.
Danglinert profile picture
@CincinnatiRick If he moves into DC, it would be great for PBF as it would no longer make sense to move. Ha.
poppagasket profile picture
link to crack spread. updated ~twice a day.

@poppagasket Great ! Thank you.
What is the most simple way to track crack spread, say on a weekly basis? I do most of my energy investing through ETFs but am considering PBF.
Good article!
Didn’t know that over 20% below all time high is “near” all time high, but yes I agree there is upside
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