Credit Suisse analyst boosts Western Refining rating in wake of stock selloff
AP – Fri, Dec 2, 2011 12:32 PM EST.. .
http://finance.yahoo.com/news/Western-Refining-shares-rise-apf-4271586412.html?x=0
NEW YORK (AP) -- Shares of Western Refining Inc. rose Friday after a Credit Suisse upgraded the oil refiner to "Outperform," saying that the recent selloff of its shares wasn't justified.
The El Paso, Texas-based company's shares have fallen about 18 percent since Nov. 16, when Enbridge Inc. said it would pay $1.15 billion to buy half ownership in the Seaway crude pipeline system between Texas and Oklahoma from ConocoPhillips. The stock closed Thursday at $12.73, still up 20 percent for the year
Enbridge said it will reverse the direction of crude oil flows on the Seaway pipeline to allow it to transport oil from Oklahoma to the Gulf Coast. That news helped oil prices hit $100 per barrel in North America for the first time in four months.
Jumps in oil prices hurt refiners like Western Refining, because they put pressure on their profit margins, especially when demand for gasoline is weak.
The selloff also was prompted by concerns about seasonably weak fourth-quarter West Coast and Gulf Coast margins, but despite those worries, Westlake said the selloff was overdone.
Westlake pointed to the company's efforts to pay off debt. Western Refining said earlier this week that it was selling its Yorktown terminal and refinery, along with part of a pipeline, for $220 million.
The analyst also noted that the company's 20012 and 2013 cash flows are largely protected, thanks to its hedging program.
In midday trading, shares of Western Refining rose 82 cents, or 6.4 percent, to $13.55.
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