Andeavor

In this series, we’ll be sorting refining stocks in terms of earnings expectations for 4Q17. If we rank them on their likely YoY growth in EPS, then Andeavor (ANDV) occupies the top slot.

Valero’s liquidity In 1H17, Valero Energy (VLO) generated $2785 million in cash from operations. The company had cash outflows of $880 million in the form of capital expenditure and deferred turnaround and catalyst costs and $627 million in the form of dividends. Valero’s liquidity surplus Valero’s cash outflows amounted to around $1507 million in 1H17, […]

Marathon Petroleum’s solvency ratios are higher than the industry average, which is not a comfortable situation.

Of the 17 analysts covering Andeavor (ANDV), 15 (88%) have rated the stock a “buy” so far in August 2017. Two analysts have rated ANDV a “hold.”

Currently, MPC trades at a forward PE (price-to-earnings) ratio of 14.8x, above its peer average of 13.8x.

In this series, we’ll perform a cross-sectional analysis of refining stocks. We’ll examine their moving averages and eight-day price forecasts based on implied volatility, and compare their leverage, liquidity, capex, and refining margins.

Four (27%) of the 15 analysts covering DK have rated it a “buy” so far in August 2017.

Let’s take a look at midstream stocks trading at attractive yields. The stocks have a market capitalization of over $5 billion and yields over 7.0%.

In the previous part of this series, we discussed refining stocks’ dividend yield trends. Now, we’ll look at the forward valuations for Marathon Petroleum (MPC), Andeavor (ANDV), Valero Energy (VLO), and Phillips 66 (PSX).

Since October 2, 2017, Marathon Petroleum (MPC) stock has risen 15.7%, outperforming the SPDR S&P 500 ETF (SPY). SPY has risen 5.3% in the same period.

In this series, we’ll look at the historical outliers in midstream energy, which have generated massive wealth amid turbulent times.

In 3Q17, Valero Energy (VLO) saw a rise in its gross refining margin by $2.2 per barrel over 3Q16 to $10.9 per barrel.

MPC trades at valuations above its peer averages, likely because it is now in the process of restructuring the organization to unlock value.

ANDV’s Midcontinent index value has declined to $19.00 per barrel in 4Q17 quarter-to-date from $20.10 per barrel in 3Q17.

Fifteen of the 19 analysts covering Andeavor (ANDV) rated it as a “buy” in December 2017.

Comparing Valero’s valuation In this last part, we’ll compare Valero Energy’s (VLO) valuation with peers’. VLO is presently trading at a forward PE (price-to-earnings) ratio of 13.4x, below its peers’ average of 13.9x. Peers PBF Energy (PBF) and CVR Refining (CVRR) also have below-average ratios, of 12.3x and 11.2x, respectively. Also, VLO has a forward EV-to-EBITDA (enterprise […]

MPC’s cash flow excess as a percentage of its earnings ability, or cash flow from operations, stood at 28.0%.

VLO’s Midcon crack indicator fell from $18.50 per barrel in 3Q17 to $16.50 per barrel in 4Q17.

Currently, Phillips 66’s 50 DMA trades 11.3% above its 200 DMA.

In 4Q17, Valero Energy (VLO) rose 19.3%, the highest among its peers. Marathon Petroleum (MPC), Andeavor (ANDV), and Phillips 66 (PSX) rose 18.1%, 10.2%, and 9.5%, respectively, in 4Q17.

On May 8, Marathon Petroleum (MPC), MPLX LP (MPLX), and Andeavor Logistics LP (ANDX) announced that MPLX would acquire ANDX.

Energy Transfer (ET) was one of the few midstream stocks that fell last week. Energy Transfer fell 3.1% last week.

Energy Transfer (ET) stock was rated a “strong buy” or “buy” by 88% of analysts surveyed by Reuters.

HollyFrontier’s (HFC) forward PE ratio is 10.4x, below peers’ average of 11.2x. Marathon Petroleum’s (MPC), Andeavor’s (ANDV), and Phillips 66’s (PSX) forward PE ratios are higher than the average, at 12.8x, 13.8x, and 12.1x, respectively.

Andeavor (ANDV) posted its second-quarter earnings results on August 6. In the period, it surpassed estimates.

Andeavor (ANDV) reported second-quarter revenues of $12.5 billion, which surpassed Wall Street analysts’ estimate.

Of the 17 analysts tracking Phillips 66 (PSX), seven analysts gave “buy” or “strong buy” ratings on the stock.

In the earlier two parts of this series, we looked at Andeavor’s (ANDV) earnings estimates and expected refining margin for Q2 2018.

Delek US Holdings (DK) is presently trading at a forward PE multiple of 8.2x, below peers’ average of 11.5x.

The average institutional ownership in Marathon Petroleum (MPC), Andeavor (ANDV), Valero Energy (VLO), and Phillips 66 (PSX) is over 70%.

Eleven of the 21 analysts covering Valero Energy (VLO) have rated it a “buy.”

Marathon Petroleum’s (MPC) reported net income increased to $37.0 million in the first quarter from $30.0 million year-over-year.

Marathon Petroleum (MPC) posted its first-quarter results on April 30. MPC’s revenues of $19.0 billion missed Wall Street estimates.

Marathon Petroleum (MPC) and Andeavor (ANDV) have agreed to a strategic merger.

Marathon Petroleum (MPC) posted 1Q18 revenues of $19 billion, which missed Wall Street analyst estimates.

Marathon Petroleum (MPC) posted its 1Q18 earnings on April 30. The company missed its earnings estimates for the quarter.

Marathon Petroleum (MPC) and Andeavor (ANDV) have entered an agreement to merge. Today, ANDV opened with a bang!

Phillips 66 (PSX) posted its 1Q18 results today. Let’s compare its 1Q18 performance and estimates.

Valero Energy posted its 1Q18 results yesterday. Let’s compare VLO’s 1Q18 performance to estimates.

Genesis Energy is expected to post 27.4% YoY EBITDA growth in the first quarter of 2018 compared to 1Q17.

In this series, we’ll look at the top ten midstream companies based on earnings growth expectations for 1Q18.

Phillips 66 (PSX) is anticipated to post its 1Q18 results on April 27, 2018.

In this series, we’ll rank refining stocks by their dividend yields and see if the dividends have risen, fallen, or remained steady.

Next in our series of the biggest movers in the energy sector, we’ll now look at the highest-losing stocks this week from the US refining and marketing sector.

Currently, MPC is trading at a forward PE (price-to-earnings) multiple of 12.5x, higher than its peer average of 11.9x.

ANDV expects around $350.0 million–$425.0 million of annual savings in the form of operational synergies by June 2019.

EQT Midstream Partners posted a strong 18.0% YoY (year-over-year) rise in its EBITDA during the most recent quarter.

In the previous part of this series, we discussed refining stocks’ dividend expectations for 2Q18.

Valero Energy (VLO) announced its results on February 1, 2018, before the market opened. Valero stock opened at $96.42 per share, above its previous day’s close of $95.97.

Valero Energy’s (VLO) gross refining margin rose by $0.93 per barrel over 4Q16 to $8.8 per barrel in 4Q17.

Phillips 66 Partners (PSXP) reported its 4Q17 results on February 2, 2018.

Crestwood Equity Partners was upgraded by Capital One Securities to “overweight” in the week ending January 26, 2018.

In 2017, Andeavor (ANDV), the third-best-performing energy stock from the Energy Select Sector SPDR ETF (XLE), rose ~31% to $114.35 from its 2016 close of $87.45.

As of January 23, 2018, 22 analysts were covering Valero Energy (VLO). Three of them have “strong buy” recommendations for the stock, and six have “buy” recommendations.

Institutional ownership in Marathon Petroleum (MPC), Andeavor (ANDV), Valero Energy (VLO), and Phillips 66 (PSX) rose in December 2017 over June 2017.

PSX trades at a 9.1x forward EV-to-EBITDA multiple and a 15.5x forward price-to-earnings ratio, above the peer averages.

The correlation coefficient of Phillips 66 versus WTI stood at 25.0% in the past one-year period.

Marathon Petroleum’s (MPC) Refining segment’s operations yielded 46.0% gasoline and 33.0% distillates in 3Q17.

Marathon Petroleum’s (MPC) capex rose 30.0% year-over-year to $2.9 billion in 9M17, primarily due to its acquisition and investment in its Midstream segment.

Implied volatility in Marathon Petroleum (MPC) has fallen from 23.2% on October 2, 2017, to its current level of 19.2%.

Andeavor’s PEG ratio stands at 0.41, above the peer average of 0.36.

The Midcontinent region had the highest rise in the crack spread of 93.0% YoY to $21.20 per barrel in 3Q17.

As of November 23, 2017, four of the 14 analysts covering Delek US Holdings (DK) stock gave it a “strong buy” recommendation, and five gave it a “buy.”

Also, Andeavor’s (ANDV) consolidated refining index could fall in 4Q17.

What is institutional ownership? In this part, we’ll look at changes in institutional ownership in Valero Energy (VLO). Institutional ownership is a measure of how many shares of a company are owned by institutions such as banks and mutual funds. Institutional ownership suggests these institutions’ confidence level in a stock. Usually, everything else being equal, higher […]

Valero’s cash flow In the first nine months of this year, Valero Energy (VLO) generated $3.8 billion in cash from operations. The company had a cash outflow of $1.3 billion in the form of deferred turnaround and catalyst costs and capital expenditure, and $936 million in the form of dividends. Valero’s cash flow surplus Valero’s cash […]

Valero’s ethanol earnings outlook In this part, we’ll look at Valero Energy’s (VLO) ethanol earnings and outlook. Valero’s adjusted operating income from the ethanol segment fell from $106 million in 3Q16 to $82 million in 3Q17, due to the segment’s margin narrowing. This fall was partly offset by a rise in VLO’s ethanol output. The ethanol […]

Andeavor (ANDV) had the highest gross refining margin in 3Q17, followed by Marathon Petroleum (MPC), Valero Energy (VLO), and Phillips 66 (PSX).

The Refining and Marketing segment’s operating income rose from $252.0 million in 3Q16 to $1.1 billion in 3Q17.

After the earnings release, 19 analysts have rated Marathon Petroleum. Fifteen of them have assigned it a “buy” or “strong buy,” and four have assigned it a “hold.”

Since July 3, 2017, Phillips 66 stock has risen 13.3%. By comparison, the SPDR S&P 500 ETF (SPY) has risen 5.3%.

In 2Q17, Phillips 66’s (PSX) total adjusted net income of $569.0 million rose 14% YoY (year-over-year).

The bearish sentiment in MPC stock appears to have risen. Over the same period, the stock’s price has risen 7.5%.

Refiners’ valuation In the previous part, we discussed refining stocks’ dividend expectations for 4Q17. In this part, we’ll look at Marathon Petroleum’s (MPC), Andeavor’s (ANDV), Valero Energy’s (VLO), and Phillips 66’s (PSX) forward valuation. Their average forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) and forward PE (price-to-earnings) multiples are 8.0x and 16.0x, […]

In this part of our series, we’ll analyze Valero Energy’s (VLO) refining margin indicators for 3Q17. Let’s start by examining Valero’s refining margin in the second quarter of 2017.

The PEG ratio is a price-to-earnings to growth ratio. The ratio intends to examine a stock’s valuation after factoring in its expected future growth rate.

So far in this series, we’ve seen how Andeavor’s stock has outperformed the broader market and what ANDV’s moving average suggests.

The analyst rating graph below shows that 14 (or 82%) of the 17 analysts covering Andeavor (ANDV) have rated it a “buy” in October 2017.

Valero’s moving averages in 1H17 In 1Q17, Valero stock declined, which was likely due to its dismal 4Q16 earnings. Plus, gasoline and distillate inventories rose in the industry, which further pressured the stock.  Despite the fall in its stock price, VLO’s 50-day moving average stood above its 200-day moving average. Valero’s 50-day moving average had […]

Valero’s stock performance Since July 3, 2017, the start of 3Q17, Valero Energy’s (VLO) stock has risen 5.4%, outperforming the SPDR S&P 500 ETF (SPY), the overall market indicator. The ETF has risen 3.1% in the same period.  VLO’s peer Andeavor (ANDV) has risen 9.4% since July 3. Also, Phillips 66 (PSX) and Marathon Petroleum […]

Valero expects to achieve ~$1.2 billion–$1.4 billion of incremental annual EBITDA by 2021.

In 2Q17, PSX allocated 47% of its capex to the Refining segment, 44% to the Midstream segment, and 5% to the Marketing and Specialty segment.

In 1H17, Phillips 66 saw its cash from operations fall 7% YoY to ~$1.3 billion. This was due to negative cash flow in 1Q17, led by seasonal inventory build-up.

Phillips 66’s (PSX) leverage ratio, or its net-debt-to-EBITDA multiple, stood at 3.7x in 2Q17—higher than the average industry ratio of 2.4x.

Since July 3, 2017, Marathon Petroleum (MPC) stock has risen 3.7%, outperforming the SPDR S&P 500 ETF (SPY), the overall market indicator.

Valero Energy (VLO) has more than 50% “buy” ratings, with 11 (52%) of the 21 analysts covering the stock giving it a “buy.”

Refining margins in 2Q17 In this part, we’ll compare leading US downstream companies’ GRMs (gross refining margins). Marathon Petroleum (MPC) had the widest GRM in 2Q17, followed by Andeavor (ANDV), Phillips 66 (PSX), and Valero Energy (VLO). The companies saw mixed GRM trends in 2Q17—let’s look at them more closely. Marathon Petroleum’s refining margin MPC’s gross […]

Andeavor’s refining margin index Andeavor’s (ANDV) refining index values, which are regional crack indicators, have improved since 2Q17. Index values in California and the Pacific Northwest have risen to $15.80 and $13.10 per barrel, respectively, from $15.30 and $11.40 per barrel in 2Q17. Its mid-continent index value has risen to $16.90 per barrel from $16.30 per […]

Andeavor’s leverage Andeavor’s net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) ratio stood at 3.3x in 2Q17, higher than the industry average of 2.4x. The ratio shows a company’s leverage level as a multiple of its earnings. The industry average was based on seven American refining companies’ ratios.  In 2Q17, Andeavor’s total debt-to-capital ratio stood […]