PBF Energy’s implied gains
In the previous part, we discussed Valero Energy (VLO), which has the second-highest implied gains of 60% based on Wall Street analysts’ mean target price. In this part, we’ll discuss the stock that’s expected to post the third-highest gains—PBF Energy (PBF).
PBF Energy ranks third with 56% implied gains based on its target price. The implied gains have risen due to the fall in the stock price, mainly in the current quarter. The stock has decreased 4% in the past year. During the same period, analysts’ mean target price on the stock has increased 54%.
Earnings growth, valuation, and dividend yield
Wall Street analysts expect PBF Energy’s earnings to increase 150% to $2.8 per share in 2018. In the first nine months, PBF Energy’s adjusted EPS stood at $2.2. Like Valero Energy, PBF Energy has also benefited from the sharp decline in its RIN (Renewable Identification Number) expense. PBF Energy expects its RIN expense to be $150 million–$175 million in 2018, which represents a YoY (year-over-year) decline. PBF Energy’s RIN expense was ~$300 million in 2017. PBF Energy trades at a forward PE ratio of 7.1x, which is below peers’ average of 7.6x.
PBF Energy has consistently paid dividends to shareholders. In the current quarter, PBF Energy paid a dividend of $0.3 per share, which was stable YoY. PBF Energy’s current dividend yield is 3.7%, which is above the peer average of 3.3%.
PBF Energy has the third-highest implied gains, a high growth expectation, a lower valuation, and an above-average dividend yield.