PBF Energy: Hold Rating Amid Operational Challenges and Cost Pressures

Analyst Joe Laetsch from Morgan Stanley maintained a Hold rating on PBF Energy (PBF – Research Report) and keeping the price target at $28.00.

Joe Laetsch has given his Hold rating due to a combination of factors impacting PBF Energy’s financial outlook. Despite a 25% increase in benchmark cracks, the company faces challenges from higher maintenance costs and elevated operating expenses, which offset these gains. Additionally, the tight light/heavy crude differentials continue to pressure overall margin capture, although there are slight improvements expected in the Gulf and East Coasts.
In the Renewable Diesel segment, a switch from the BTC to PTC tax credit and a planned catalyst change are expected to negatively impact results. The Logistics segment is anticipated to remain stable, but incremental fire-related costs at Martinez and increased natural gas consumption due to colder weather on the East Coast are likely to exert additional pressure on operating expenses. These factors contribute to a cautious outlook, justifying the Hold rating.

In another report released on April 1, Wells Fargo also maintained a Hold rating on the stock with a $22.00 price target.