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Factors to Know Ahead of PBF Energy's (PBF) Q4 Earnings

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PBF Energy Inc. (PBF - Free Report) is expected to report fourth-quarter 2018 earnings on Feb 14, 2019.

The company surpassed the Zacks Consensus Estimate twice in the trailing four quarters, with average negative earnings surprise of 40.2%. In the last reported quarter, the refining and marketing player’s earnings per share of $1.13 beat the Zacks Consensus Estimate of $1.04. In the to-be-reported quarter, the company is expected to report earnings of 77 cents per share.

PBF Energy Inc. Price and EPS Surprise

PBF Energy Inc. Price and EPS Surprise | PBF Energy Inc. Quote

Let’s see how things are shaping up for this announcement.

Which Way are Estimates Trending?

Let’s take a look at estimate revisions to get a clear picture of what analysts are thinking about the company before the earnings release.

The Zacks Consensus Estimate of 77 cents for the fourth quarter has seen three upward and five downward revisions by firms in the past 30 days. It reflects a significant increase from the year-ago loss of 4 cents per share.

Factors at Play

PBF Energy operates through five refineries spread across East Coast, Gulf Coast, West Coast and Mid-continent areas, representing a diversified asset base. The refining system of PBF Energy is complex, reflecting that the company’s oil refineries are more sophisticated than most other refiners, with a capacity to generate lighter and better grades of refined products.

The Zacks Consensus Estimate for crude oil and feedstocks throughput is pegged at 847 thousand barrels per day (MBbls/d), lower than the year-ago quarter’s 870.9 MBbls/d.

The Zacks Consensus Estimate for gross refining margin (excluding special items) is pegged at $9.18 per barrel of throughput, higher than the year-ago quarter’s $7.06.

Notably, the Zacks Consensus Estimate for refinery operating expense is pegged at $5.36 per barrel of throughput, higher than the year-ago level of $5.02.

Finally, the Zacks Consensus Estimate for income from operations for the Refining segment is pegged at $226 million, lower than the year-ago level of $291 million. Conversely, income from the Logistics segment is projected at $40.8 million, higher than the fourth-quarter 2017 level of $36.7 million.

What Does Our Model Unveil?

Our proven model does not conclusively show that PBF Energy is likely to beat the Zacks Consensus Estimate in the to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Earnings ESP: Earnings ESP represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate. PBF Energy has an ESP of -2.43% as the Most Accurate Estimate stands at 75 cents while the Zacks Consensus Estimate is pegged at 77 cents.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: PBF Energy currently carries a Zacks Rank #3. Though a Zacks Rank of 3 increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.

We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Energy Stocks With Favorable Combination

Here are some companies from the energy space which, according to our model, have the right combination of elements to post an earnings beat in the upcoming releases.

Houston, TX-based Par Pacific Holdings, Inc. (PARR - Free Report) has a Zacks Rank #2 and an Earnings ESP of +21.70%. The company is scheduled to report quarterly earnings on Mar 4. You can see the complete list of today’s Zacks #1 Rank stocks here.

Midland, TX-based Concho Resources Inc. (CXO - Free Report) has a Zacks Rank #3 and an Earnings ESP of +1.07%. The company is slated to report fourth-quarter earnings on Feb 19.

Oklahoma City, OK-based Gulfport Energy Corporation (GPOR - Free Report) has a Zacks Rank #3 and an Earnings ESP of +3.30%. The company is set to report quarterly earnings on Mar 4.

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