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On Wednesday, UBS analysts maintained a Neutral rating on CVR Energy (NYSE:CVI) stock, with a steadfast $21.00 price target, close to the current trading price of $20.58. Despite recent challenges, the company maintains a significant 17.47% dividend yield. The firm’s analysis indicated a more pronounced expected loss for the company’s first-quarter earnings per share (EPS) compared to the consensus on Wall Street. UBS anticipates CVR Energy to report a loss of $0.92 per share, which is notably higher than the street’s expectation of a $0.71 loss per share. According to InvestingPro, two analysts have recently revised their earnings downwards for the upcoming period.
The revised earnings forecast is primarily attributed to a significant planned maintenance event at CVR Energy’s Coffeyville Refinery, which was out of operation for a total of 60 days during the quarter. This downtime at the refinery, a key component of the company’s operations, has led UBS to adjust its predictions for the company’s financial performance. The impact is reflected in the company’s weak gross profit margins of 6.5%, though InvestingPro data shows the company maintains strong liquidity with a current ratio of 1.66.
In addition to the EPS adjustment, UBS also modified its estimate for the company’s first-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA). The firm now expects CVR Energy to post a loss of $12 million in EBITDA, diverging sharply from the street’s projection of a $21 million profit. This forecasted loss further reflects the impact of the Coffeyville Refinery’s downtime on the company’s financial health.
Capital expenditures (capex) for the quarter are projected by UBS to reach $45 million. Furthermore, the analysts estimate that the turnaround expenses for the refinery will amount to $150 million. However, it is important to note that these cash outlays are expected to be split between the first and second quarters of 2025. The substantial costs associated with the refinery’s maintenance are significant factors in the revised estimates for CVR Energy’s financial performance.
UBS’s projections provide investors with a detailed view of the anticipated financial outcomes for CVR Energy following the planned maintenance at one of its key facilities. The firm’s analysis underscores the short-term financial implications of operational disruptions, even as the Neutral rating and price target remain unchanged. InvestingPro analysis suggests the stock is currently slightly undervalued, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of this and 1,400+ other US stocks.
In other recent news, CVR Energy reported its fourth-quarter earnings for 2024, surpassing analysts’ expectations with an adjusted loss per share of $0.13, compared to the anticipated $0.42. The company’s revenue for the quarter was $1.95 billion, slightly exceeding the consensus estimate of $1.93 billion. Despite a year-over-year decline in net income, CVR Energy achieved a net income of $28 million for the quarter. The company’s renewable segment showed improvement, with positive adjusted EBITDA driven by lower vegetable oil feed prices and better catalyst performance. Analysts from Scotiabank (TSX:BNS) noted the company’s strong refining operations but expressed concerns over a weaker-than-expected first-quarter outlook for 2025. CVR Energy also enhanced its liquidity by increasing funds through a Term Loan and selling a 50% stake in Midway Pipeline. Meanwhile, Caesars (NASDAQ:CZR) Entertainment announced the appointment of two new independent directors, Jesse Lynn and Ted Papapostolou, from Icahn Enterprises (NASDAQ:IEP) to its Board of Directors. This move is part of a broader strategy to enhance shareholder value, with Carl Icahn emphasizing a shared goal of maximizing shareholder value.
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