Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 28 Aug, 24 | PARR | Buy | USD 21.55 | USD 23.3 | USD 24.8 | 1 day | 15.1% |
Data Powered by EOD Historical Data (“EODHD”).
Par Pacific Holdings, Inc. owns and operates energy and infrastructure businesses. The company operates through three segments: Refining, Retail, and Logistics. The Refining segment owns and operates three refineries that produces ultra-low sulfur diesel, gasoline, jet fuel, marine fuel, distillate, asphalt, low sulfur fuel oil, and other associated refined products primarily for consumption in Hawaii, Pacific Northwest, Wyoming, and South Dakota. The Retail segment operates 121 fuel retail outlets, which sell merchandise, such as soft drinks, prepared foods, and other sundries in Hawaii under the Hele, 76, and nomnom brands; and gasoline, diesel, and retail merchandise in Washington and Idaho under the Cenex, nomnom, and Zip Trip brand names. The Logistics segment owns and operates terminals, pipelines, a single point mooring, and trucking operations to distribute refined products throughout the island of Oahu, Maui, Hawaii, Molokai, and Kauai. It also leases marine vessels; owns and operates a crude oil pipeline gathering system, a refined products pipeline, storage facilities, and loading racks in Wyoming; and a jet fuel storage facility and pipeline that serves Ellsworth Air Force Base in South Dakota. In addition, this segment owns and operates a marine terminal, a unit train-capable rail loading terminal, storage facilities, a truck rack, and a proprietary pipeline that serves Joint Base Lewis McChord. The company was formerly known as Par Petroleum Corporation and changed its name to Par Pacific Holdings, Inc. in October 2015. Par Pacific Holdings, Inc. was incorporated in 1984 and is headquartered in Houston, Texas.
Stock Repurchases: Repurchased USD66 million worth of stock in the second quarter, enhancing shareholder value
Refinancing Success: Comprehensive refinancing expected to save USD13 million annually, improving financial flexibility
Increased Production Costs: Notable increase in production costs, particularly in the Montana refinery, rising from USD8.07 to USD16.18 per barrel
Decreased Adjusted EBITDA: Adjusted EBITDA fell to USD81.6 million from USD150.8 million in the same quarter of 2023
Commodity Price Volatility, Regulatory and Compliance Risks, Geographic Concentration, and Macro uncertainties
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 21.55 | 17.8 | 23.3 | 24.8 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Operational Highlights: Par Pacific successfully executed the Billings turnaround within the projected time frame and budget, contributing to its long-term operational goals. The company also completed a comprehensive refinancing of its working capital as of May 31, 2024, and repurchased USD 66 million of common stock during the second quarter.
Laramie Energy In Q2 2024, Par Pacific received a cash distribution of USD 1.5 million from Laramie Energy LLC, but recorded equity losses of USD (1.4) million. Laramie reported a net loss of USD (6.5) million, including unrealized derivative losses, compared to a net income of USD 6.7 million in Q2 2023. Adjusted EBITDAX for Laramie was USD 10.0 million, a slight decrease from USD 10.2 million the previous year.
Technical Commentary:
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas Refining & Marketing
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| PARR Par Pacific Holdings Inc |
-0.56 3.54% | 15.26 | 4.12 | 9.92 | 0.27 | 2.07 | 0.46 | 5.05 |
| PSX Phillips 66 |
-0.8525 0.77% | 109.52 | 8.10 | 9.57 | 0.39 | 1.91 | 0.50 | 5.71 |
| MPC Marathon Petroleum Corp |
-0.965 0.72% | 132.41 | 5.69 | 11.07 | 0.38 | 2.26 | 0.49 | 3.55 |
| VLO Valero Energy Corporation |
-0.975 0.82% | 117.61 | 4.54 | 9.21 | 0.31 | 1.74 | 0.34 | 2.87 |
| NTOIF Neste Oyj |
- -% | 12.90 | 16.56 | 10.27 | 1.22 | 3.18 | 1.31 | 16.26 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a medium to long-term duration. Recommendations provided in this report are based on financial as well as technical parameters in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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