HALISTER1: Refiners Estimates Cut; PSX Downgraded on Outlook: Wells Fargo

Refiners Estimates Cut; PSX Downgraded on Outlook: Wells Fargo

(Bloomberg) -- Expectations for 2Q refiner results have been “significantly slashed” vs earlier this year; most refining equities delivered “very disappointing” performances, writes Wells Fargo analyst Roger Read.
  • Reduces 3Q and 4Q 2016, 2017 EPS ests. for ALJ, DK, HFC, MPC, PBF, PSX, TSO, VLO
  • Increases ests. for WNR, citing complete ownership of NTI
  • Expects increased discussions and speculation about “economic run cuts” being necessary component to re- balancing refined product markets
  • Downgrades PSX to market perform from outperform based on “stock’s resilience versus the group as well as a shakier outlook for its refining operations"; lowers valuation range to $75-$82 from $89-$94
  • Maintains outperform ratings for MPC, PBF and VLO; believes earnings and cash flows can recover from 2016’s trough to more of a mid-cycle level
  • NOTES: July 6, Refiners Underperform on Gasoline Cracks Decline, Output Cuts; East Coast Run Cuts; Import Cargo Flow Falls
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
ALJ US (Alon USA Energy Inc)
DK US (Delek US Holdings Inc)
HFC US (HollyFrontier Corp)
MPC US (Marathon Petroleum Corp)
PBF US (PBF Energy Inc)

People
Roger Read (Wells Fargo & Co)

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