Benchmark Raises Price Target & Estimates on Tesoro Corp. (TSO) But Maintains Sell Rating

Benchmark is reiterating its Sell rating on shares of Tesoro Corporation (NYSE: TSO), but is raising its price target from $14 to $18 due to its new estimates.

The firm is raising its FY11 EPS estimates from $1.54 to $3.67 to reflect the benefit of deeply discounted WTI-referenced crude prices to TSO's mid-continent division earnings. The firm notes that its FY12 estimate of $3.73 is based on its expectation for narrowing WTI related crude price discounts.

Benchmark is raising its mid-cycle earnings estimate from $1.46 to $2.35 as a result of management's new cost efficiency initiatives and as the company begins to benefit from the Mandan expansion.

The firm comments that, "We reaffirm our cautious investment posture on TSO based on our belief that the shares will underperform the independent refiner sub-sector, which, in turn, we expect to underperform broad market indices given an expected deterioration in refining margins."

For more ratings news on Tesoro Corporation click here and for the rating history of Tesoro Corporation click here.

Shares of Tesoro Corporation closed at $25.65 yesterday.

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