UPDATE: JPMorgan Upgrades PBF Energy (PBF) to Overweight

JPMorgan analyst Phil Gresh upgraded PBF Energy (NYSE: PBF) from Neutral to Overweight, PT $43.00.

The analyst comments "While PBF has been the top performer in the refining group YTD, shares have traded off ~32% since peak. We believe current levels are highly attractive given improvements in the company’s balance sheet. The company has created significant equity value via reduction of net debt, where our YE23 estimate of ~$900mm is a >$2B reduction over our forecast from last December, driven largely by ~$1.8B in 1H22 FCF and ~$2.3B expected over the next 18 months. Additionally, shares are currently trading at a ~11.5% FCF/EV yield vs. ~8.0-8.5% at year-end ’21. Assuming a normalization to an ~8.5% yield, above our group average of ~8%, PBF now has upside to our Dec 23 price target well above the average of our coverage group. Further, we think PBF has the most potential for a rate of change story in terms of returns of capital to shareholders, as the company has thus far maintained a focus on the balance sheet while others have shifted back to dividends/buybacks. We think shares could outperform on the announcement of a base dividend or a special dividend/share buyback, which would likely not come until mid-2023 or early 2024, but could be signaled earlier. We upgrade PBF to Overweight from Neutral and establish a Dec 23 price target of $43/share, based on a ~8.5% 2024E FCF/EV yield."

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

Shares of PBF Energy closed at $29.69 yesterday.

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