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Where Do Analysts Ratings for Tesoro Stand Pre-Earnings?

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Analysts’ ratings for Tesoro

In this series, we’ve examined Tesoro’s (TSO) 1Q17 estimates, refining margin outlook, and stock performance ahead of its earnings release expected on May 8, 2017. In this article, we’ll look at analysts’ ratings for Tesoro.

Tesoro has been rated by a total of 18 analysts. Of this total, 12 analysts (or 67%) have assigned “buy” or “strong buy” ratings, six (or 33%) have assigned “hold” ratings, and none have assigned “sell” or “strong sell” ratings on the stock. TSO’s mean target price of $103 per share implies a 29% gain from its current level.

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Changes in analysts’ ratings for Tesoro

Analysts’ ratings for Tesoro have improved compared to April 2016, when TSO had more “hold” ratings and fewer “buy” ratings.

But TSO has witnessed cuts in the target prices assigned to it by various investment banking companies. Recently, Jefferies, which has “buy” rating on the stock, has cut TSO’s target price to $94 per share. Credit Suisse has cut its target price to $93 from $110. The company has a “neutral” rating on the stock. JPMorgan Chase and Morgan Stanley have cut their target prices on the stock to $98 and $100, respectively.

Peer comparison

Tesoro’s peers Delek US Holdings (DK), HollyFrontier (HFC), and Western Refining (WNR) have been rated as “buys” by 33%, 29%, and 17% of analysts, respectively. Other downstream players PBF Energy (PBF) and Alon USA Energy (ALJ) have been rated as “buys” by 35% and 11% of analysts, respectively.

For exposure to small-cap value stocks, you can consider the iShares Russell 2000 Value ETF (IWN). The ETF has ~5% exposure to energy sector stocks including DK, WNR, and ALJ.

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