Simmons Remains Sidelined on Western Refining (WNR) - PT cut to $26

Simmons maintained a Neutral rating on Western Refining (NYSE: WNR) and cut the price target to $26.00 (from $27.00), following the company's 1Q earnings report. Current refining margin indicators appear below what is implied by consensus expectations for 2Q’16 in Simmons' view, with the $10/bbl increase in oil prices during April ’16 negatively impacting margin capture rates so far this quarter.

Analyst Jeff Dietert commented, "WNR is well positioned near the Delaware Basin, one of the lowest cost and highest growth shale basins in the US, providing growth potential for WNR’s gathering efforts once oil prices rise sufficiently to encourage increased activity. WNR’s NTI acquisition is expected to close shortly after the NTI special shareholder meeting on June 23. The transaction price consists of $15/sh in cash and an exchange rate of 0.2986 WNR shares per NTI unit. The price was agreed upon in December 2015, at a point when NTI and WNR were both trading substantially higher than current valuations, representing a substantial overhang on WNR stock. Post-merger, a simpler corporate structure will be established, with a more diversified refining asset base, an integrated retail network and a more efficient framework for logistics asset sales from the parent to WNRL."

For an analyst ratings summary and ratings history on Western Refining click here. For more ratings news on Western Refining click here.

Shares of Western Refining closed at $24.40 yesterday.

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