Mizuho lowers PBF Energy stock PT to $51 from $54, expecting 2Q24 miss

On Wednesday, Mizuho Securities adjusted its outlook on PBF Energy (NYSE:PBF), reducing its price target to $51 from the previous figure of $54, while retaining a neutral stance on the company's stock. The revision comes in anticipation of PBF Energy's second-quarter performance, which is projected to fall short of the current market consensus.

The firm forecasts significant misses in earnings before interest, taxes, depreciation, and amortization (EBITDA), free cash flow (FCF), and earnings per share (EPS) for PBF Energy, with expected variances of 67%, 272%, and 117% respectively, compared to consensus figures.

These projections are rooted in lower-than-anticipated margin capture, which has been attributed to delays and complications in completing turnarounds, as well as a mismatch in the timing of product supply from PBF Energy relative to the refining cracks during the quarter.

The adjusted price target is based on a net asset value (NAV) approach, which has been recalibrated in light of the anticipated earnings miss. The firm's neutral rating suggests a cautious stance on the stock, implying that the potential for stock price appreciation may be limited in the near term according to the firm's analysis.

Investors and market watchers will be closely monitoring PBF Energy as it approaches the reporting of its second-quarter financial results, to assess the impact of the operational issues on its financial health and future outlook.

In other recent news, PBF Energy has seen multiple adjustments to its share price target by various analyst firms. Piper Sandler reduced the target to $47 due to challenges in the refining sector, leading to a 43% cut in earnings per share (EPS) estimates for the second quarter. TD Cowen further reduced the stock's price target to $45, attributing this to an unexpected decline in refining margins in April.

Despite these adjustments, PBF Energy posted solid Q1 results for 2024, reporting an adjusted net income of $0.85 per share and adjusted EBITDA of $301.5 million. The company remains optimistic about the future, citing strong product demand, a net cash position, and a commitment to shareholder returns.

These are the recent developments for PBF Energy, which faces potential benefits from regional trends, particularly in the West Coast margins, and challenges from the evolving dynamics of the refining industry.

InvestingPro Insights

In light of the recent adjustments to PBF Energy's outlook by Mizuho Securities, examining real-time data from InvestingPro provides further context on the company's financial standing. PBF Energy's market capitalization currently stands at $4.93 billion, reflecting the scale of the business in the energy sector. The company's P/E ratio, at a modest 2.75, suggests that the stock may be undervalued relative to its earnings, a point underscored by a P/E ratio of 4.48 for the last twelve months as of Q1 2024.

InvestingPro Tips highlight that management has been actively buying back shares, which could indicate confidence in the company's value proposition. Additionally, while analysts have revised their earnings downwards for the upcoming period, it's worth noting that PBF Energy's cash flows can sufficiently cover interest payments, and its liquid assets exceed short-term obligations, providing some financial stability. Moreover, the company is trading near its 52-week low, potentially offering an attractive entry point for investors.

For those interested in a deeper analysis, InvestingPro offers comprehensive insights, including 12 additional InvestingPro Tips for PBF Energy, available through a subscription. To enhance your investment research on PBF Energy, consider using the promo code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.

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