PBF Energy Inc. (NYSE:PBF) was double upgraded by Piper Sandler on January 8, moving from Underweight to Overweight. The analyst simultaneously reduced the price target from $42 to $40, which still suggests a 22% upside from current levels. This revision was driven by expectations that West Coast supply balances will tighten significantly this year.
On January 5, PBF Energy disclosed that rebuild activities at its Martinez refinery are now anticipated to continue into February. The facility, with a capacity of 157,000 barrels per day, was damaged by a fire in February 2025 and has been running at reduced rates since early in the second quarter of that year. Piper Sandler noted that despite this delay, the refiner remains highly exposed to the PADD 5 region.
The analyst pointed out that while PBF's organic cash flow generation lags behind some peers, insurance proceeds from the fire will support its balance sheet. These funds could potentially enable shareholder returns if refining margins improve. Trading well below its recent highs and at approximately 4 times EV/EBITDA, the stock is viewed as inexpensive.
PBF Energy may gain from recent U.S. actions regarding Venezuela, as the company already purchases Venezuelan crude from Chevron and is positioned to potentially increase those volumes. The influx of cheaper Venezuelan oil could lower costs for U.S. buyers relative to Canadian supplies and help expand refining margins.