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Will Tesoro’s Stock Uptrend Last after 4Q15 Earnings?

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Dec. 4 2020, Updated 10:52 a.m. ET

Tesoro’s stock performance

Tesoro Corporation’s (TSO) stock was on an uptrend in 2015, fueled by healthy refining margins. TSO rose 21% in the trailing 12 months up to January 20, 2016.

In October 2015, Tesoro’s stock price surged. The increase was due to remarkable 3Q15 results. A series of strategic moves—such as a sale of midstream assets to Tesoro Logistics LP (TLLP) and an acquisition of logistics assets in Alaska and the Bakken Shale—further supported the stock price.

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But TSO’s stock gains faced a setback in December 2015. From December 1, 2015, to January 20, 2016, TSO’s stock fell 26%. This fall came hot on the tails of the crude oil export ban lifting in the United States. The policy changes sparked fears of a fall in US refineries’ refining margins. During the same period, Tesoro’s peers Marathon Petroleum Corporation (MPC), Valero Energy Corporation (VLO), and Phillips 66 (PSX) fell 32%, 10%, and 17%, respectively.

Tesoro management comments

Tesoro (TSO) is growing rapidly, acquiring assets, and enhancing strategic synergies between its business segments. The company aims to diversify its earning portfolio by 2018.

Per TSO management, “Tesoro has a proven track record of delivering on our commitments. We are on track to report record results for 2015. Further, we expect $400 million to $500 million of business improvements in 2016. By focusing on our strategic priorities, business improvements and growth in our logistics and marketing businesses, we expect to deliver $3.5 billion to $4.0 billion of EBITDA in 2018.”

For exposure to refining sector stocks, you can consider the Vanguard Energy ETF (VDE). The ETF has ~11% exposure to the sector.

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