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Assessing Analysts’ 12-Month Estimates for Downstream Companies

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Dec. 4 2020, Updated 10:53 a.m. ET

Alon USA moved below its 20-day moving average

Alon USA Energy (ALJ) was trading 1% below its 20-day moving average on March 4, 2016, after rising above this moving average in the previous day’s trade. Since December 10, when it fell below its 20-day moving average, ALJ has not been able to stay above this short-term moving average. Since February 25, ALJ has risen 7%. On February 25, it hit a 52-week low of $9.20. ALJ is currently trading 55% below its 52-week high and 12% above its 52-week low.

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The downstream companies (XLE) in the chart above are trading an average of 16% below their respective 100-day moving averages. Delek US Holdings (DK) and CVR Refining (CVRR) are trading 28% and 39% below their respective 100-day moving averages. Phillips 66 (PSX) is the only refining stock in the group that traded above its 100-day moving average on March 4.

Wall Street analysts’ consensus estimates

The US-based refiners shown in the chart above could rise an average of 29.4% over the next 12 months, based on Wall Street analysts’ consensus median estimates. Based on Wall Street analysts’ median estimates, Alon USA Energy, PBF Energy (PBF), and HollyFrontier (HFC) could rise by 28%, 31.2%, and 30%, respectively, from their current levels. Northern Tier Energy (NTI) has already risen 3.3% above Wall Street analysts’ median estimate.

In the next part of this series, we’ll discuss moving averages and analysts’ estimates for integrated oil and gas companies.

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