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PBF Energy: Large Implied Gains, Highest Earnings Decline Rate

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PBF Energy’s implied gains

We have ranked refining stock based on implied gains. The implied gains are calculated using analysts’ mean target price. Marathon Petroleum (MPC) and Phillips 66 (PSX) have higher implied gains at 59% and 40%, respectively. Now, we’ll discuss PBF Energy’s (PBF) implied gains.

PBF Energy is a US downstream company with refining and logistics operations. The company is ranked third with 34% implied gains based on its target price. The implied gains have risen due to a steeper fall in its stock price compared to its mean target price. The stock has decreased 33% in the past year. During the same period, analysts’ mean target price on PBF Energy stock has declined 4%.

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Earnings growth, valuation, and dividend yield

Analysts expect PBF Energy’s earnings to fall 46% to $1.8 per share in 2019. In the first quarter, PBF Energy’s adjusted EPS was -$1.2 per share. Analysts expect the company’s earnings to fall due to weaker oil spread expectations. In the first-quarter earnings conference call, PBF Energy’s CEO, Thomas Nimbley, said, “One area that remains a challenge is the narrow light heavy differential being largely driven by the externally driven supply constraints, the heavy sour crude oil and a well-supplied light crude oil market.”

PBF Energy trades at a forward PE ratio of 10.4x, which is above the peer average of 9.3x. In the current quarter, PBF Energy will likely pay a dividend of $0.3 per share, which was stable year-over-year. PBF Energy’s current dividend yield is 3.9%, which is above the peer average of 3.8%.

PBF Energy has the third-highest implied gains and an above-average dividend yield. However, the stock trades at a high valuation. The company is expected to post the steepest decline in earnings in 2019.

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