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On Wednesday, UBS analyst Manav Gupta revised the price target for Par Pacific Holdings (NYSE:PARR) to $14.75, a decrease from the previous target of $20.00, while keeping a Neutral rating on the stock. According to InvestingPro data, the stock currently trades at $12.90, down over 62% in the past year, though analysis suggests the company may be undervalued at current levels. Gupta’s assessment attributes the adjustment to a predicted increase in costs and reduced profitability for the first quarter of 2025.
The analyst has modified the initial quarter 2025 earnings per share (EPS) estimate for Par Pacific Holdings to a loss of $0.81 from an earlier projection of a $0.40 loss, which contrasts with the consensus estimate of a $0.41 loss. InvestingPro data shows that five analysts have recently revised their earnings estimates downward, with the company set to report its next earnings on April 30, 2025. The expected EBITDA for the same quarter was also adjusted to $9 million, a slight decrease from $10 million in the fourth quarter of 2024.
Gupta noted that a weaker contribution from the refining sector is the primary reason for the negative revisions. The first quarter of 2025 was highlighted as a period with higher turnaround activities for Par Pacific, leading to increased costs and reduced capture rates. Despite this, the company is anticipated to continue its share buyback program, with $15 million in buybacks modeled for the first quarter - confirming one of several key InvestingPro insights about management’s aggressive share repurchase strategy.
Furthermore, the analyst has reduced the earnings per share estimates for the subsequent years, citing a less favorable environment for refining margins. The estimated EPS for 2026 has been lowered to $1.40 from $1.86, and the forecast for 2027 has been adjusted to $1.98 from the previous $2.34 estimate. The revisions reflect expectations of weaker crack spreads and narrower differentials, which are likely to impact the company’s financial performance. The company currently operates with a significant debt burden and weak gross profit margins of 11%, though its liquid assets exceed short-term obligations with a current ratio of 1.62.
In other recent news, Par Pacific Holdings reported mixed results for the fourth quarter of 2024. The company posted a loss of $0.79 per share, which was significantly larger than the expected loss of $0.45 per share. However, revenue exceeded forecasts, coming in at $1.83 billion compared to the anticipated $1.76 billion. Goldman Sachs recently upgraded Par Pacific’s stock rating from Neutral to Buy, raising the price target to $19, citing potential growth in the company’s Hawaii refining segment and stable earnings from its Logistics and Retail operations. Conversely, Mizuho (NYSE:MFG) Securities adjusted its outlook on Par Pacific, reducing the price target to $18, based on anticipated earnings falling short of expectations, particularly in the Refining segment. The company is also dealing with operational challenges, including a Wyoming refinery shutdown and scheduled maintenance in Montana. Despite these hurdles, Par Pacific is focusing on strategic projects, such as a sustainable aviation fuel initiative, to bolster future performance.
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