Wells Fargo Starts Alon USA Energy (ALJ) at Market Perform

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Wells Fargo initiated coverage on Alon USA Energy (NYSE: ALJ) with a Market Perform rating and $9-$10 valuation range.

The firm cited "weak margin in the California asphalt and Gulf Coast markets, as well as Alon’s highly leveraged balance sheet. Strong Mid-Continent margin could somewhat mitigate weak margin in other refining markets, but we do not expect meaningful growth in the refining business through our 2013 forecast period." Despite trading at a discount to most peers on metrics like earnings, cash flow and EBITDA, Wells Fargo sees this as speaking "to the company’s less complex
refining assets and exposure to the Gulf Coast and California asphalt market."

For an analyst ratings summary and ratings history on Alon USA Energy click here. For more ratings news on Alon USA Energy click here.

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