HollyFrontier: Analysts’ Recommendations




HollyFrontier (HFC) has been covered by 17 Wall Street analysts. Among the analysts, three (or 18%) recommended a “buy” or “strong buy,” 11 (or 65%) recommended a “hold,” and three recommended a “sell” or “strong sell.”

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Recently, Jefferies increased its target price on HollyFrontier stock from $49 to $50. However, JPMorgan Chase cut its target price on the stock from $63 to $59. HollyFrontier’s mean target price is $60 per share, which implies an ~23% gain from the current level.

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Analysts’ mixed opinions

Wall Street analysts expect HollyFrontier’s earning to fall in 2019 due to weaker refining cracks and spreads, which could result in lower refining margins and earnings. HollyFrontier’s Lubricant segment, which the company has been expanding in the past few years, is expected to face weaker base oil cracks in 2019. The weaker base oil cracks could lead to lower Rack Back lubricant earnings for the company. Lower refining earnings and weaker Rack Back earnings could lead to lower profits in the current year. Wall Street analysts expect HollyFrontier’s earnings to fall 23% in 2019.

However, the company has strong financials to continue its expansion spree. HollyFrontier had a comfortable debt position and a surplus cash flow situation in 2018.

Analysts have mixed opinions on HollyFrontier likely due to the company’s strong financials and lower earnings outlook.

Peers’ ratings

Marathon Petroleum (MPC) and Valero Energy (VLO) have been rated as a “buy” by 100% and 74% of the analysts, respectively. Delek US Holdings (DK), Phillips 66 (PSX), and PBF Energy (PBF) have been rated as “buy” by 53%, 61%, and 44% of the analysts, respectively.


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