Par Pacific Holdings (NYSE: PARR) recently received an upgrade in stock rating from JPMorgan, moving from Neutral to Overweight. The firm also adjusted the price target for Par Pacific to $30.00 from the previous $36.00. This change comes as Par Pacific's shares have underperformed compared to other refiners since the beginning of the year.
Despite facing challenges in the diesel cracks market and the demand sentiment in Asia, Par Pacific has been actively pursuing share buybacks. JPMorgan anticipates that the company will continue this strategy, especially as its stock price has seen a sharp decline. The upgrade to Overweight reflects JPMorgan's view that the current valuation of Par Pacific's shares is highly attractive.
In Q2 2024, Par Petroleum reported a strong performance with an adjusted EBITDA of $82 million and an adjusted net income of $0.49 per share. The company also repurchased $66 million worth of shares, demonstrating its commitment to shareholder value.
Despite concerns from investment firms Piper Sandler, Mizuho Securities, and TD Cowen, Par Petroleum remains focused on strategic growth initiatives, including a $120 million investment in its Billings facility over the next few years.
InvestingPro Insights
InvestingPro data shows that Par Pacific Holdings has a market capitalization of $987.48 million and a low P/E ratio of 2.17, indicating potential undervaluation. Management's aggressive share buyback strategy aligns with expectations of continued share repurchases to support the stock price.
While the company remains profitable with reported revenue of $8.76 billion in the last twelve months, its stock price has declined significantly over the past year. Investors can access additional tips from InvestingPro for a more comprehensive analysis of Par Pacific Holdings.
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Analysis:
Par Pacific Holdings (PARR) has seen an upgrade in stock rating from Neutral to Overweight by JPMorgan, with a revised price target of $30.00. Despite challenges in the market, the company's aggressive share buyback strategy and strategic growth initiatives indicate a commitment to enhancing shareholder value. Investors should consider the potential undervaluation of Par Pacific's stock and the company's profitability amidst recent market performance.
