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HollyFrontier Stock Fell despite Better Earnings

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HollyFrontier stock

HollyFrontier (HFC) announced its fourth-quarter results on February 20 before the market opened. HollyFrontier stock opened at $56.9 per share—below the close of $57.6 the previous day. The stock saw highs of $57.4 and lows of $55.5 during the day. Eventually, HollyFrontier stock closed at $56.1, which was ~2.6% lower than the previous day’s close.

Valero Energy (VLO) and Phillips 66 (PSX) rose 0.8% and 0.7%, respectively, on February 20. Marathon Petroleum (MPC) and Delek US Holdings (DK) rose 0.2% and 6.4%, respectively, on the same day. The SPDR S&P 500 ETF (SPY), a broader market indicator, rose 0.2% on February 20. WTI crude oil prices rose 1.5%.

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Why did HollyFrontier stock decline?

HollyFrontier stock declined despite better-than-expected earnings on February 20. The decline was likely due to the negative EBITDA in the company’s lubricant and specialty products segment. The company has been strengthening its lubricant segment through acquisitions for the past few years. Read Is HFC’s Lubricants and Specialty Products Segment Expanding? to learn more. However, the segment posted negative earnings in the fourth quarter, which might have hurt the market sentiments. The segment was likely impacted by the turnaround at the Mississauga plant and lower base oil cracks.

HollyFrontier acknowledged the narrowing oil spreads, which impacted the stock on February 20. HollyFrontier has posted a steep rise in its refining margin and earnings due to wider oil spreads in the past few quarters. However, the oil spreads have started narrowing. Canadian crude oil differentials and the Midland oil spread have been under pressure.

Next, we’ll discuss analysts’ ratings for HollyFrontier after its fourth-quarter earnings.

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