PBF Energy price target lowered to $50 from $59 at Wells Fargo

Wells Fargo analyst Roger Read lowered the firm’s price target on PBF Energy to $50 from $59 and keeps an Overweight rating on the shares. The analyst notes PBF is his top pick among the mid-cap refiners which is consistent with his Overweight rating. The stock appears inexpensive even employing a 4.0-times multiple on his 2024 EBITDA forecast. Read believes the company’s recent experience with an over-levered balance sheet still weighs on its valuation. PBF’s recent decision to roll up its MLP subsidiary for a combination of cash and stock almost certainly resulted in "forced" selling as midstream investors are disinterested in owning refining equities, the analyst contends. He sees PBF’s direct exposure to the East Coast as a positive given Atlantic Basin shortfall for distillates. The expected startup of its RD conversion at its Gulf Coast refining facility should contribute to reduced renewable fuels compliance costs in 2023 and beyond, Read adds.