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MPC, VLO, ANDV, PSX: How 3Q17 Treated Refiners

PART:
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Part 2
MPC, VLO, ANDV, PSX: How 3Q17 Treated Refiners PART 2 OF 8

How Refining Stocks’ Moving Averages Trended in 3Q17

Refining stocks’ moving averages in 1H17

At the beginning of the year, Marathon Petroleum (MPC), Valero Energy (VLO), Andeavor (ANDV), and Phillips 66 (PSX) saw a fall in their stock prices, likely due to their depressed 4Q16 earnings. Also, gasoline and distillate inventories surged, further pressurizing the stocks. Despite the fall in stock prices, MPC, ANDV, and VLO’s 50-day moving averages stood above their 200-day moving averages. However, PSX’s 50-day moving average broke below its 200-day moving average in March 2017. A short-term moving average breaking below a longer-term average is a bearish sign.

How Refining Stocks&#8217; Moving Averages Trended in 3Q17

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In 2Q17, refining companies reported their 1Q17 earnings. MPC, VLO, PSX, and ANDV all surpassed their earnings estimates for 1Q17. Also, MPC’s, VLO’s, and ANDV’s refining margin indicators rose between 1Q17 and 2Q17. MPC and VLO’s 50-day moving averages stayed above their 200-day moving averages in the second quarter. However, Andeavor’s (ANDV) 50-day moving average fell below its 200-day moving average as it was in the process of acquiring Western Refining. On the conclusion of the acquisition, ANDV’s 50-day moving average crossed over its 200-day moving average.

Refining stocks’ moving average changes in 3Q17

In 3Q17, refining companies reported their 2Q17 earnings. VLO and PSX surpassed their earnings estimates for 2Q17. Whereas PSX’s 50-day moving average surpassed its 200-day moving average, MPC missed its earnings estimate. Also, ANDV’s operating income fell steeply. However, MPC’s, VLO’s, and ANDV’s refining margin indicators rose between 2Q17 and 3Q17, greatly influenced by Hurricane Harvey.

Currently, ANDV’s 50-day moving average is 14% above its 200-day moving average, and the highest in the peer group. MPC’s, VLO’s, and PSX’s 50-day moving averages are 4%, 4%, and 5% above their 200-day moving averages, respectively. These stocks’ 50-day moving averages standing above their 200-day moving averages implies bullishness.

The 50-day moving averages of the SPDR Dow Jones Industrial Average ETF (DIA) and the SPDR S&P 500 ETF (SPY), which represent the overall economy, are 5% and 4% above their 200-day moving averages, respectively. Continue to the next part to look at MPC’s, VLO’s, ANDV’s, and PSX’s three-month price forecast range based on their implied volatility.

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