Piper Sandler maintained a Neutral rating on Par Pacific Holdings (NYSE:NYSE:PARR) Tuesday with a price target of $23.00. The firm's analysis indicated a mixed outlook for the company's third-quarter earnings, citing both challenges and positive developments.
The firm updated its third-quarter estimates for Par Pacific, factoring in the latest market valuations and operational expectations. The revised estimates reflect weaker headline margins and lower capture rates in Hawaii and Washington, influenced by factors such as softer clean product rates, reduced hedge gains, and weak asphalt pricing. Despite these pressures, the firm noted encouraging signs, particularly in the Rockies region, which has seen a return to strong relative pricing for the season.
Piper Sandler's revised estimates suggest a very modest downside to the consensus estimates on Wall Street for the third quarter, forecasting earnings per share (EPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA) at -$0.08 per share and $53 million, respectively. This is a slight adjustment from the previous estimates of -$0.25 per share and $55 million.
In other recent news, Par Pacific Holdings reported robust Q2 2024 earnings, with an adjusted EBITDA of $82 million and adjusted net income of $0.49 per share. Amid these developments, the company repurchased $66 million worth of shares, demonstrating its commitment to shareholder value. Investment firms Piper Sandler, Mizuho Securities, and TD Cowen recalibrated their expectations for Par Petroleum's stock performance, revising their price targets to $23.00, $30.00, and $32.00 respectively.
JPMorgan upgraded Par Pacific's stock rating from Neutral to Overweight, despite reducing the price target to $30.00. The firm anticipates that Par Pacific will continue its share repurchase strategy, especially as its stock price has seen a sharp decline. Par Pacific's notable presence in Asia and its active pursuit of share buybacks following the completion of the Billings acquisition were also highlighted.
InvestingPro Insights
Recent data from InvestingPro provides additional context to Piper Sandler's analysis of Par Pacific Holdings (NYSE:PARR). The company's market capitalization stands at $1.05 billion, with a notably low P/E ratio of 2.32, suggesting the stock may be undervalued relative to its earnings. This aligns with an InvestingPro Tip indicating that PARR is "trading at a low earnings multiple."
Despite the challenges highlighted in Piper Sandler's report, PARR has shown strong revenue growth of 19.45% over the last twelve months as of Q2 2024, reaching $8.76 billion. However, the company's gross profit margin of 14.49% supports another InvestingPro Tip that PARR "suffers from weak gross profit margins."
The stock's recent performance has been volatile, with a significant 51.26% decline over the past six months. This volatility is reflected in an InvestingPro Tip noting that "stock price movements are quite volatile." For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for PARR, providing a deeper understanding of the company's financial health and market position.
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