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On Wednesday, Goldman Sachs analyst Neil Mehta adjusted the firm’s stance on Par Pacific Holdings (NYSE:PARR), downgrading the stock from Buy to Neutral and setting a price target of $19.00. Mehta’s decision comes after a notable surge in the company’s shares, which have outperformed the market significantly since late March. According to InvestingPro data, PARR currently trades at $22.47, with analysts’ targets ranging from $14.75 to $26.00, suggesting the stock is currently trading above InvestingPro’s Fair Value estimate.
Par Pacific Holdings has seen its shares climb by more than half since March 27, 2025, when it was added to Goldman Sachs’ Buy list. This increase of 52% stands in stark contrast to the S&P Energy Index, which fell by 11%, and the broader S&P 500’s modest gain of 2% in the same period. According to Mehta, the current stock price now more accurately reflects the improved refining margin environment in Hawaii and Washington, leading to a reduced potential for upside compared to other stocks in the sector that Goldman Sachs rates as Buy, such as VLO, MPC, and DINO.
Despite the downgrade, Mehta maintained a constructive outlook on the refining sector, citing factors such as increased OPEC+ production and tightening refining supply/demand dynamics. The analyst clarified that the rating change does not relate to the potential for small refinery exemptions (SREs) concerning Renewable Identification Numbers (RINs), which could still provide additional value if realized.
Mehta also pointed out the promising earnings contributions from Par Pacific’s Retail and Logistics segments, noting the potential for growth in these areas. Looking forward, the focus for Par Pacific will likely remain on capital allocation priorities, including share repurchases and reducing debt. Additionally, oil demand trends in Asia are expected to be an important factor in the company’s performance moving forward.
In other recent news, Par Pacific Holdings reported its first-quarter 2025 earnings, revealing a larger-than-expected loss but a notable revenue beat. The company reported an adjusted net loss per share of $0.94, significantly below the forecasted loss of $0.34 per share, while revenue reached $1.75 billion, surpassing expectations of $1.61 billion. Despite the earnings miss, Par Pacific’s strategic initiatives, including a share repurchase of $51 million reducing outstanding shares by 5%, have been a focal point. Analysts at TD Cowen have shown confidence in Par Pacific by raising the stock’s price target from $16.00 to $20.00, maintaining a Buy rating. The firm’s analysis suggests that industry outages and lower oil prices could positively impact Par Pacific’s performance. The company is also making progress on its Sustainable Aviation Fuel project in Hawaii, scheduled for a late 2025 launch. These developments, along with Par Pacific’s focus on capital allocation and improving free cash flow, have contributed to an optimistic outlook among analysts.
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