Tesoro’s analyst ratings
In the earlier part, we analyzed Tesoro Corporation’s (TSO) stock performance. In this part, we will examine the ratings by analysts covering the stock.
Tesoro’s analyst ratings show that 47% of the surveyed analysts covering the stock rate it as a “buy.” The remaining analysts rate it as a “hold.” The highest 12-month price target for TSO stands at $140, indicating a 33% gain from current levels. Plus, there are no “sell” ratings for TSO. In fact, even the lowest price target, at $107, implies a 2% gain. The average 12-month price target stands at $124, indicating a 18% rise from current levels.
Tesoro’s peers Marathon Petroleum Corporation (MPC), Valero Energy Corporation (VLO), and Phillips 66 (PSX), have been rated as a “buy” by 89%, 77%, and 53% of analysts, respectively. For exposure to these stocks, investors can consider the Vanguard Energy ETF (VDE), which has ~11% exposure to refining and marketing sector stocks.
Tesoro’s recent strategic moves
Tesoro (TSO) is growing rapidly, acquiring assets, and enhancing strategic synergies between its business segments. TSO recently sold its Los Angeles storage and pipeline assets to Tesoro Logistics LP (TLLP) for total consideration of $500 million.
In the latter part of the year, TSO has been on a buying spree. The company has agreed to acquire marketing and logistics assets in Anchorage and Fairbanks, Alaska, from Flint Hills Resources (FHR). Plus, Tesoro has agreed to acquire Great Northern Midstream LLC, which has vast logistics assets in the Williston Basin of North Dakota.
According to TSO’s management, “Our acquisition of Great Northern Midstream is aligned with our strategy to grow our logistics business, supply advantaged crude oil to our refineries, and make these assets available to third-party customers. Combining the Great Northern Midstream assets with our Tesoro High Plains Pipeline will create a leading crude oil pipeline system in the most prolific region of the Bakken.”
In the next part, we will discuss Tesoro’s growth strategy.