UPDATE: Credit Suisse Upgrades HollyFrontier (HFC) to Outperform
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Credit Suisse analyst Manav Gupta upgraded HollyFrontier (NYSE: HFC) from Neutral to Outperform with a price target of $42.00 (from $45.00).
The analyst comments "HFC is a name currently out of favor. HFC’s decision to buy Puget Sound refinery and fund a portion of purchase with dividend suspension has been met with skepticism. Management told us that this reaction was somewhat expected, and it understands this is now a show-me story. HFC made some design changes to its RD project, which was part of the reason capex was increased, and that has also not helped with the stock sentiment. While in the near term there will be some headwinds (higher capex), over the longer-term, we believe adding renewable diesel capacity with feedstock flexibility along with the acquisition of Puget Sound will help HFC grow earnings and restore the suspended dividend. In our opinion, the 2 RD projects coupled with Puget Sound would be a $300-$400M EBITDA tailwind in 2022. We believe once HFC can successfully demonstrate earnings growth potential, the market will give it due credit."
Shares of HollyFrontier closed at $29.03 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Upgrades
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