Citi Upgrades CVR Energy (CVI) to Buy

February 22, 2021 4:44 AM EST
Get Alerts CVI Hot Sheet
Price: $18.48 -2.43%

Rating Summary:
    2 Buy, 9 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 17 | Down: 14 | New: 42
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Citi analyst Prashant Rao upgraded CVR Energy (NYSE: CVI) from Neutral to Buy with a price target of $31.00 (from $16.00).

The analyst comments "We think the broader market is missing the valuation uplift CVI’s move into renewable diesel presents. The first phase of its Wynnewood project – targeted for a mid-year start-up – is like a low-cost option play to capitalize on a favorable biomass market, adding $10/sh to CVI’s $21/sh as-is intrinsic value with very limited downside risk. Our calculations suggest a short payback period of 18 months, IRR of 48%, and base case NPV of ~$550mm. The downside risk is highly mitigated as approx. 60% of the $110mm development capex is associated with logistics assets that have high salvage values."

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

Shares of CVR Energy closed at $22.90 yesterday.

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