HF Sinclair Corporation (DINO – Research Report), the Energy sector company, was revisited by a Wall Street analyst today. Analyst Jason Gabelman from TD Cowen maintained a Hold rating on the stock and has a $31.00 price target.
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Jason Gabelman’s rating is based on the challenges that HF Sinclair Corporation’s refining segment is facing, particularly due to seasonal inland dynamics and tight crude quality differentials, which are expected to persist into early 2025. These factors have led to weaker refining margins, which fell below the company’s medium-term guidance. While an improvement in seasonality is anticipated in the second and third quarters, the potential uplift may be mitigated by new product pipelines increasing supply in inland markets and uncertainties surrounding the impact of a recent California refinery outage.
Gabelman also notes that HF Sinclair Corporation’s cash return policy, which aims for a 50% net income payout, suggests negligible buybacks in the next few years. This could make the company less attractive to investors compared to larger peers offering higher distribution yields and stronger refining unit margins. However, DINO’s diverse earnings streams provide a degree of defensiveness. Additionally, the company’s strategy concerning its lubricant segment, focusing on organic growth and being open to small acquisitions or potential sales, further supports the Hold rating amid current market conditions.
In another report released today, Barclays also maintained a Hold rating on the stock with a $37.00 price target.