Benchmark Analyst Comments on Independent Refiners: TSO, SUN & VLO

October 6, 2009 8:56 AM EDT

Benchmark analyst comments on Independent Refiners:

"We are revising our 2009, 2010 and mid-cycle earnings estimates for the Independent Refiner sub-sector of our coverage universe based primarily on company specific factors. We are reaffirming our Market Weight rating on the independent refiner sub-sector based on neutral mid-cycle earnings valuation relationships, although we acknowledge the potential for the short term relative underperformance."

"We are raising our investment rating on Tesoro Corporation (NYSE: TSO) shares to Hold from Sell based largely on an excessively steep, in the context of recently improving margin capture rates, 39% mid-cycle earnings multiple discount to peers."

"We are reaffirming our Hold rating on the shares of both Sunoco (NYSE: SUN) and Valero (NYSE: VLO) based on valuations which are discounting refining margins roughly in line with our mid-cycle margin outlook...We are modestly more favorably inclined toward SUN shares (versus VLO) based on intermediate term restructuring potential, and a 120 basis point dividend yield premium."

Related Categories

Analyst Comments

Stocks Mentioned

Related Entities

• Dividend

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?