Barclays Maintains an 'Equalweight' on HollyFrontier (HFC); Strong Company, but MPC and TSO Offer Better Risk Reward
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Price: $36.39 --0%
Rating Summary:
10 Buy, 12 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 3
Rating Summary:
10 Buy, 12 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 3
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Barclays maintains an 'Equalweight' on HollyFrontier (NYSE: HFC), price target raised $2 to $73.
Barclays analyst says, "We think HFC's 2Q11 result will have a rather neutral impact on the shares' near-term performance. While earnings came in better than consensus, it trailed our estimate of $3.63 and the high end of consensus expectation of $3.89 per share. Including FTO, HFC proforma 2Q11 would have earned $3.42 per share, also a slight disappointment. Nevertheless, we believe HFC is at the right place and the right time. It has been the most prominent poster child of reaping the benefit of the much elevated WTI/Brent spread in the recent months. Based on our analysis, we estimate the company's annual EPS could be impacted by $9.00 for every $10/b change in the W&T (NYSE: WTI) spread, or 14% of its current share price and 74% of our 2012 EPS estimate. The company's high leverage is driven by its refinery locations. All of its refineries are 100% exposed to WTI-linked crudes compared to 35% for Marathon Petroleum (NYSE: MPC), 23% for Tesoro (NYSE: TSO), and 15% for Valero (NYSE: VLO)."
For more ratings news on HollyFrontier click here and for the rating history of HollyFrontier click here.
Shares of HollyFrontier closed at $66.64 yesterday.
Barclays analyst says, "We think HFC's 2Q11 result will have a rather neutral impact on the shares' near-term performance. While earnings came in better than consensus, it trailed our estimate of $3.63 and the high end of consensus expectation of $3.89 per share. Including FTO, HFC proforma 2Q11 would have earned $3.42 per share, also a slight disappointment. Nevertheless, we believe HFC is at the right place and the right time. It has been the most prominent poster child of reaping the benefit of the much elevated WTI/Brent spread in the recent months. Based on our analysis, we estimate the company's annual EPS could be impacted by $9.00 for every $10/b change in the W&T (NYSE: WTI) spread, or 14% of its current share price and 74% of our 2012 EPS estimate. The company's high leverage is driven by its refinery locations. All of its refineries are 100% exposed to WTI-linked crudes compared to 35% for Marathon Petroleum (NYSE: MPC), 23% for Tesoro (NYSE: TSO), and 15% for Valero (NYSE: VLO)."
For more ratings news on HollyFrontier click here and for the rating history of HollyFrontier click here.
Shares of HollyFrontier closed at $66.64 yesterday.
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