PBF Energy: Analysts’ Recommendations and Target Price



PBF Energy

PBF Energy (PBF) is fifth among the six US refiners based on the “buy” ratings assigned by Wall Street analysts. Marathon Petroleum (MPC) is the top refiner with 100% “buy” ratings.

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The above graph shows that seven (or 44%) of the 16 analysts covering PBF Energy recommended a “buy” in April. Six analysts (or 38%) recommended a “hold,” while three analysts (or 19%) recommended a “sell.”

PBF Energy’s mean target price of $42 per share implies an ~23% gain from the current level. Recently, Raymond James lowered its target price on PBF Energy marginally from $41 per share to $40 per share. JPMorgan Chase cut its target price from $37 to $32.

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Analysts are divided

PBF Energy’s earnings have been impacted radically by high RIN (Renewable Identification Numbers) expenses. However, RIN prices fell in 2018. PBF Energy’s RIN costs fell by $150 million to $144 million in 2018. The prices are still lower in the first quarter of 2019, which could result in cost savings for the company.

However, in the first quarter, the weaker refining environment is expected to impact PBF Energy’s earnings. The Canadian spread has weakened in the first quarter, which could impact the company’s refining margin and profits in the quarter. The expectation of lower earnings could have led to “hold” and “sell” ratings for the stock. Wall Street analysts expect PBF Energy to post a loss in the first quarter. In 2019, the company’s earnings are expected to fall 31%.


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