PBF Energy (PBF) Stock Jumping in After-Hours Trading on Exxon Refinery Deal

NEW YORK (TheStreet) -- Shares of PBF Energy (PBF) are higher by 7.07% to $29.98 on heavy volume in after-hours trading on Thursday afternoon, after the petroleum refiner announced that its subsidiary has agreed to purchase Chalmette Refining, LLC, from ExxonMobil (XOM) and PDV Chalmette, LLC for $322 million.

"The acquisition of the Chalmette Refinery, and its associated logistics assets, represents a significant step in the strategic growth of PBF Energy and PBF Logistics. Upon completion, we will have increased our refining capacity by 35% and added meaningful Gulf Coast assets to our businesses," PBF CEO Tom Nimbley said in a statement announcing the deal.

By the end of trading, 5.59 million shares of PBF Energy had exchanged hands as compared to its average daily volume of 1.48 million shares.

This deal is expected to close before the end of the year. 

Separately, TheStreet Ratings team rates PBF ENERGY INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate PBF ENERGY INC (PBF) a HOLD. The primary factors that have impacted our rating are mixed-some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 12.8% when compared to the same quarter one year prior, going from $77.44 million to $87.32 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.95, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that PBF's debt-to-equity ratio is low, the quick ratio, which is currently 0.64, displays a potential problem in covering short-term cash needs.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 38.6%. Since the same quarter one year prior, revenues fell by 36.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The share price of PBF ENERGY INC has not done very well: it is down 12.84% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PBF ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: PBF Ratings Report

More from Markets

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns

Apple Suppliers Slide After European, Asian Chipmakers Echo Smartphone Concerns

Global Stocks Edge Higher, But Bond Yields, Oil Prices May Test Market Strength

Global Stocks Edge Higher, But Bond Yields, Oil Prices May Test Market Strength

SAP Shares Leap After Cloud Business Prompts Full-Year Guidance Upgrade

SAP Shares Leap After Cloud Business Prompts Full-Year Guidance Upgrade

Sohn Conference Briefly Distracts From Barrage of Earnings -- ICYMI

Sohn Conference Briefly Distracts From Barrage of Earnings -- ICYMI

Dow and Nasdaq Finish Lower as 10-Year Treasury Yield Hovers Near 3%

Dow and Nasdaq Finish Lower as 10-Year Treasury Yield Hovers Near 3%