JPMorgan analyst John Royall upgraded PBF Energy to Overweight from Neutral with an unchanged price target of $43. The shares have traded off 32% since their peak, with current levels “highly attractive” given improvements in the company’s balance sheet. PBF has created significant equity value via reduction of net debt, Royall tells investors in a research note. He believes PBF has the most potential for a “rate of change story in terms of returns of capital to shareholders,” noting it has thus far maintained a focus on the balance sheet while peers have shifted back to dividends and buybacks. The shares could outperform on the announcement of a base dividend or a special dividend/share buyback, which would likely not come until mid-2023 or early 2024, but could be signaled earlier, Royall writes.
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