PBF Energy reinstated with an Underperform at BofA

BofA reinstated coverage of PBF Energy with an Underperform rating and $25 price target PBF Energy, one of the purest play refiners under coverage, has a high beta to underlying refined product commodities and was the worst performing refiner during the pandemic with some going concern risk due to its leverage and large renewable identification numbers obligation to the EPA, the analyst tells investors in a research note. PBF was then a major outperformer due to global margin spikes caused by war-related supply dislocations after Russia invaded Ukraine, but the momentum has reversed as margins trended down, and further crack spread declines suggest PBF has more room to fall, BofA says. BofA is also cautious medium-term on refining and says exposure to less valuable refining districts is also a negative.