Report
Valens Research

HFC - Embedded Expectations Analysis - 2021 04 16

HollyFrontier Corporation (HFC:USA) currently trades at a premium relative to Uniform assets, with a 1.1x Uniform P/B. At these levels, the market has bullish expectations for the firm, but management may have concerns about their renewable diesel business, Mid-Con capture rates, and RIN prices

Specifically, management may have concerns about increases in spending on their renewables business, the sustainability of capital contributions from the renewable diesel business, and continued rises in RIN prices. Furthermore, they may be concerned about the impact of their inventory valuation on Mid-Con capture rates as well as the extended downtime across Mid-Con plants due to cold storms and Tulsa West maintenance
Underlying
HollyFrontier Corporation

HollyFrontier is a petroleum refiner that produces products such as gasoline, diesel fuel, jet fuel, other lubricant products, and specialty and modified asphalt. The company's segments are: Refining, which involves the purchase and refining of crude oil and wholesale and marketing of refined products; Lubricants and Specialty Products, which includes the production of lubricant products such as base oils, white oils, other products and finished lubricants; and the company's subsidiary, Holly Energy Partners, L.P., which owns and operates logistics and refinery assets consisting of petroleum product and crude oil pipelines, terminals, tankage, loading rack facilities and processing units.

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Valens Research
Valens Research

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