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PBF Energy (PBF) Jumps 170.5% YTD: What's Behind the Rally?

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PBF Energy Inc. (PBF - Free Report) shares have jumped 170.5% year to date compared with 35.3% growth of the composite stocks belonging to the industry.

The Zacks Rank #1 (Strong Buy) stock, with a market cap of $4.5 billion, has witnessed upward estimate revisions for 2022 and 2023 earnings in the past 30 days.


Zacks Investment Research
Image Source: Zacks Investment Research


Let’s delve into the factors behind the stock’s price appreciation.

The global fuel demand has recovered significantly, following the reopening of economies resulting from the considerable drop in coronavirus cases. PBF Energy is well-positioned to capitalize on the mounting fuel demand as it is one of the leading petroleum refiners in North America, with an overall Nelson Complexity Index reading of 13.2.

The company’s daily crude processing capacity of 1,000,000 barrels is higher than most peers. In the United States, PBF Energy is a prominent name for supplying heating oil, unbranded transportation fuels, lubricants, petrochemical feedstock and other petroleum products.

In 2021, PBF Energy’s crude oil and feedstocks throughput volumes were 834.5 thousand barrels per day (bpd), higher than 727.7 thousand bpd a year ago. Moreover, the refiner expects total throughput volumes of 865-925 thousand bpd this year.

With a view to diversifying its income source, PBF Energy is advancing the renewable fuel production project at a facility, which is located at the Chalmette refinery. In the first half of 2023, PBF is expecting to begin Chalmette renewable diesel production.

PBF Energy is also focused on strengthening the balance sheet. PBF lowered its consolidated debt load by more than $335 million last year and $55 million in the first quarter. Notably, the company’s consolidated cash balance at the first quarter-end was a handsome $1.4 billion.

Other Key Picks

Investors interested in the energy sector might also look at the following companies that presently sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Continental Resources, Inc. (CLR - Free Report) is an explorer and producer of oil and natural gas. The company expects to generate positive free cash flows for the seven consecutive years in 2022.

Continental has a strong focus on returning capital to shareholders. The company’s board of directors announced a quarterly dividend payment of 28 cents per share, which increased 21.7% from 23 cents per share in the previous quarter. The company also increased its existing share repurchase program to $1.5 billion.

TotalEnergies SE (TTE - Free Report) is among the top five publicly-traded global integrated energy companies. In first-quarter 2022, TotalEnergies continued with inorganic initiatives and acquired assets worth $1.4 billion.

TotalEnergies is managing long-term debt efficiently and trying to keep the same at manageable levels. As of Mar 31, 2022, cash and cash equivalents were $31,276 million. This was enough to address the current borrowings of $16,759 million.

Sunoco LP (SUN - Free Report) is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. The partnership is poised to gain from recovering gasoline demand and rising consumption of diesel fuel.

For 2022, Sunoco revised its adjusted EBITDA guidance upward to $795-$835 from the previously-mentioned $770-$810 million. The metric also suggests an improvement from the $754 million reported last year.