Murphy USA downgraded to Equal Weight from Overweight at Wells Fargo

Wells Fargo analyst Edward Kelly downgraded Murphy USA (MUSA) to Equal Weight from Overweight with a price target of $405, down from $440, after assuming coverage of the name. The firm struggles with the view that discount gas/nicotine is broken, fuel economics can turn quickly, and break-evens likely rise over time, but Wells is not optimistic around a change in the unfavorable backdrop any time soon. The raze and rebuild strategy and expanding grab and go food are good, but should take time. Murphy USA’s labor light model and built out up-stream fuel assets help it stay agile, but the firm sees more risk than upside to “guidance.”