Core Viewpoint - CVR Energy, Inc. (CVI) shares have experienced significant volatility over the past year, gaining 39% due to widening crack spreads and regulatory relief, but are down 30% from their highs in early fall [1] Summary by Relevant Sections - **Stock Performance** - CVR Energy shares gained 39% as crack spreads widened and regulatory relief emerged [1] - The shares are currently down 30% from their highs in early fall [1] - On a recent Monday, the stock price jumped significantly [1] - **Market Context** - The company has been subject to macroeconomic factors influencing its stock performance [1] - The volatility reflects broader market trends and investor sentiment [1] - **Investment Strategy** - The analysis suggests a contrarian investment approach based on macro views and turnaround stories to achieve favorable risk/reward profiles [1]

Core Viewpoint - CVR Energy, Inc. (CVI) shares have experienced significant volatility over the past year, gaining 39% due to widening crack spreads and regulatory relief, but are down 30% from their highs in early fall [1] Summary by Relevant Sections - **Stock Performance** - CVR Energy shares have gained 39% over the past year [1] - The stock is currently down 30% from its peak in early fall [1] - A notable jump in share price occurred on Monday [1] - **Market Dynamics** - The increase in share price is attributed to widening crack spreads [1] - Regulatory relief has also played a role in the stock's performance [1] - **Investment Strategy** - The company has a history of making contrarian bets based on macro views and turnaround stories to achieve outsized returns [1]

Core Insights - The year 2025 has experienced significant volatility in equity markets due to tariff issues, inflation, softening job growth, and geopolitical tensions [1] - Despite market uncertainties, investors are encouraged to consider stocks with strong broker recommendations and improving earnings estimates [2][7] Stock Recommendations - Recommended stocks include Zumiez (ZUMZ), The Beachbody Company (BODI), CVR Energy (CVI), Civitas Resources (CIVI), and Adient (ADNT), all of which have shown strong earnings estimate revisions and favorable broker recommendations [2][7] - Zumiez is a specialty retailer focusing on apparel and accessories, with a strong performance driven by North American markets [6][7] - The Beachbody Company offers a vast digital fitness library and has consistently surpassed earnings estimates, showcasing a strong digital model [8][9] - CVR Energy is involved in renewable energy and petroleum refining, with a commitment to reducing carbon emissions [10][11] - Civitas Resources benefits from a strong presence in productive U.S. shale plays, enhancing its market position [11][12] - Adient has a diverse customer base and international presence, contributing to its growth potential [12][13] Screening Strategy - A screening strategy was developed to identify stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks [4] - Key parameters include net upgrades in broker ratings, percentage change in earnings estimates, price-to-sales ratio, stock price above $5, average daily volume over 100,000 shares, and market capitalization in the top 3000 [5][6]

Core Insights - Investors in CVR Energy, Inc. (CVI) should monitor stock movements due to high implied volatility in the options market, particularly the Dec 19, 2025 $10 Put option [1] Company Overview - CVR Energy is currently rated as Zacks Rank 4 (Sell) in the Oil and Gas - Refining and Marketing industry, which is in the top 20% of the Zacks Industry Rank [3] - Over the past 30 days, no analysts have increased their earnings estimates for the current quarter, while one analyst has revised the estimate downward, leading to a consensus estimate change from earnings of 8 cents per share to a loss of 13 cents [3] Market Sentiment - The high implied volatility suggests that options traders are anticipating significant price movement for CVR Energy shares, indicating potential trading opportunities [4] - Seasoned options traders often seek high implied volatility options to sell premium, aiming for the underlying stock to not move as much as expected at expiration [4]

Financial Performance - Net sales for Q3 2025 were $1,944 million, a 6.1% increase from $1,833 million in Q3 2024[23] - Operating income for Q3 2025 was $512 million, compared to a loss of $113 million in Q3 2024[23] - Net income attributable to CVR Energy stockholders for Q3 2025 was $374 million, a significant recovery from a loss of $124 million in Q3 2024[23] - Basic and diluted earnings per share for Q3 2025 were $3.72, compared to a loss of $1.24 per share in Q3 2024[23] - For the nine months ended September 30, 2025, net income increased to $206 million compared to $5 million in the same period of 2024, representing a significant improvement[29] - For the third quarter of 2025, CVR Energy reported consolidated net sales of $1,944 million, an increase from $1,833 million in the same period of 2024, representing a growth of 6%[94] - The company incurred a net income of $401 million for the third quarter of 2025, a substantial improvement from a net loss of $122 million in the same quarter of 2024[94][95] Assets and Liabilities - Total assets decreased to $3,992 million as of September 30, 2025, down from $4,263 million at the end of 2024[21] - Total current liabilities decreased to $755 million as of September 30, 2025, from $1,098 million at the end of 2024, reflecting improved liquidity[21] - Long-term debt decreased to $1,827 million as of September 30, 2025, down from $1,907 million at the end of 2024[21] - The accumulated deficit improved to $(667) million as of September 30, 2025, from $(804) million at the end of 2024[21] - Cash and cash equivalents decreased to $670 million as of September 30, 2025, from $987 million at the end of 2024[21] - Total equity increased to $1,041 million as of September 30, 2025, up from $888 million at the end of 2024[21] Segment Performance - The Petroleum Segment generated revenue of $1,736 million for the three months ended September 30, 2025, compared to $1,645 million in 2024, reflecting an increase of 5.5%[62] - The Renewables Segment reported revenue of $44 million for the three months ended September 30, 2025, down from $64 million in 2024, a decrease of 31.3%[62] - The Nitrogen Fertilizer Segment achieved revenue of $164 million for the three months ended September 30, 2025, up from $124 million in 2024, marking a growth of 32.3%[62] - Operating income for the Petroleum segment was $518 million, compared to an operating loss of $119 million in the same quarter of 2024, indicating a significant turnaround[94][95] - The Nitrogen Fertilizer segment achieved operating income of $132 million for the nine months ended September 30, 2025, compared to an operating loss of $63 million in the same period of 2024[96] Cash Flow and Investments - Cash flows from operating activities decreased to $144 million in 2025 from $306 million in 2024, indicating a decline of approximately 53%[29] - Net cash used in investing activities increased to $309 million in 2025 from $164 million in 2024, reflecting a rise of approximately 88%[29] - Capital expenditures for the nine months ended September 30, 2025, were $130 million, slightly higher than $124 million in 2024[29] - Capital expenditures for the third quarter of 2025 totaled $40 million, down from $39 million in the same quarter of 2024[94][95] Tax and Compliance - The effective income tax rate for the nine months ended September 30, 2025, was (1.6)%, a significant change from 155.0% in the same period of 2024[44] - The effective tax rate for the three months ended September 30, 2025, was 17.9%, reflecting an increase in overall pretax earnings compared to the previous year[181] - The company recognized a benefit of $417 million for RFS compliance for the three months ended September 30, 2025, compared to an expense of $86 million for the same period in 2024[82] Operational Changes and Future Plans - The company plans to revert the renewable diesel unit at the Wynnewood Refinery back to hydrocarbon processing service in December 2025 due to unfavorable economics in the renewables business[32] - The company expects to maintain the option to switch back to renewable diesel service if incentivized, despite the current shift back to hydrocarbon processing[32] - The company is investing approximately $136 million to replace the hydrofluoric acid catalyst alkylation unit at the Wynnewood Refinery, expected to increase production capacity by about 2,500 bpd and operational by late 2027[132] - A distillate yield improvement project at the Wynnewood Refinery is projected to increase distillate production by up to 2,400 bpd, with a capital requirement reduced to $3 million[132] Legal and Regulatory Matters - The company is currently involved in litigation related to a $60 million settlement demand from plaintiffs in a lawsuit regarding a fire at the Wynnewood Refinery[86] - A lawsuit was filed against CVR Energy in October 2025 regarding an ammonia release incident, but the company cannot yet determine its potential material adverse effect on financials[87] Market Conditions and Economic Factors - The ongoing geopolitical risks, including the Russia-Ukraine war, have led to significant volatility in global markets, impacting oil, fertilizer, and agriculture industries[116] - The One Big Beautiful Bill Act signed on July 4, 2025, is expected to spur U.S. GDP growth through business investments and consumer spending, potentially increasing demand for refined products[125] - The regulatory environment remains uncertain, with potential impacts from changes in U.S. global trade policy and climate-related regulations[119]

Financial Data and Key Metrics Changes - For Q3 2025, consolidated net income was $401 million, with earnings per share at $3.72 and EBITDA of $625 million, including a $488 million benefit from small refinery exemptions [4][10] - Adjusted EBITDA for the quarter was $180 million, with adjusted earnings per share at $0.40, reflecting a significant impact from RFS liability changes and inventory valuation [10][11] - The estimated accrued RFS obligation on the balance sheet was $93 million as of September 30, representing 90 million RINs marked to market at an average price of $1.03 [11] Business Line Data and Key Metrics Changes - In the petroleum segment, adjusted EBITDA was $120 million for Q3, driven by increased Group 3 benchmark cracks and higher throughput volumes [10][12] - The ammonia utilization rate in the fertilizer segment was 95%, down from 97% in Q3 2024, with higher nitrogen fertilizer prices compared to the previous year [8][13] - The renewable segment reported an adjusted EBITDA loss of $7 million, a decline from an $8 million profit in Q3 2024, primarily due to increased soybean oil prices and the loss of the blenders' tax credit [12][13] Market Data and Key Metrics Changes - Group 3 benchmark cracks averaged $25.97 per barrel in Q3 2025, up from $19.40 per barrel in the previous year [5][10] - Average RIN prices for Q3 were approximately $6.33 per barrel, nearly 25% of the Group 3 2-1-1 crack [5] - Fertilizer prices remained high due to tight global supplies, with ammonia priced at approximately $700 per ton and urea ammonium nitrate at $360 per ton [23] Company Strategy and Development Direction - The company plans to revert the renewable diesel unit back to hydrocarbon processing during the next scheduled turnaround in December, citing profitability concerns in the renewable space [21][22] - The management remains cautiously optimistic about the refining sector, anticipating stable demand and limited new refining capacity, which could support healthy crack spreads [19][20] - The company is focused on returning the balance sheet to targeted leverage and prioritizing paying down the term loan with excess cash flow [24][25] Management's Comments on Operating Environment and Future Outlook - Management noted that refining market conditions improved in Q3, with steady refined product demand and inventories near five-year averages [18] - The company expressed concerns about the renewable business's reliance on government support, which has been lacking, impacting profitability [21] - Future pipeline projects are expected to positively impact the Mid-Continent region, providing relief for product movement [28] Other Important Information - The company ended Q3 with a consolidated cash balance of $670 million and total liquidity of approximately $830 million [14][15] - Significant cash uses included $43 million for capital and turnaround spending and $20 million for term loan repayment [14] Q&A Session Summary Question: Pipeline projects and shipping commitments - Management acknowledged the potential positive impact of new pipeline projects for Mid-Continent refiners but has not yet decided on shipping commitments [27][28] Question: Renewable diesel plant utilization - The renewable diesel unit will be mothballed, with plans to find new uses for logistical assets, but the pretreatment plant will be shut down [29][30] Question: Renewable diesel conversion costs - The conversion back to hydrocarbon processing is primarily a catalyst change, with low costs associated with mothballing the unit [36][40] Question: RIN obligation strategy - The company plans to monitor RIN obligations closely and is preparing to purchase RINs to meet compliance deadlines [46][47] Question: Dividend restart timeline - Management indicated that predicting the right debt levels for restarting dividends is challenging, but the refining environment appears favorable for future growth [52][54]

Core Viewpoint - CVR Energy reported quarterly earnings of $0.4 per share, exceeding the Zacks Consensus Estimate of $0.2 per share, and showing a significant improvement from a loss of $0.5 per share a year ago, indicating a strong earnings surprise of +100.00% [1] Financial Performance - The company achieved revenues of $1.94 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.98% and reflecting a year-over-year increase from $1.83 billion [2] - Over the last four quarters, CVR has exceeded consensus EPS estimates three times and has also topped consensus revenue estimates three times [2] Stock Performance - CVR shares have increased approximately 104.9% since the beginning of the year, significantly outperforming the S&P 500's gain of 17.2% [3] Future Outlook - The company's earnings outlook will be crucial for determining the sustainability of its stock price movement, with current consensus EPS estimates for the upcoming quarter at $0.13 on revenues of $1.93 billion, and for the current fiscal year at -$0.56 on revenues of $7.26 billion [7] - The Zacks Rank for CVR is currently 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Industry Context - The Oil and Gas - Refining and Marketing industry, to which CVR belongs, is currently ranked in the top 10% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8]

Financial Performance - CVR Energy reported earnings per diluted share of $3.72 and adjusted earnings per diluted share of $0.40 for Q3 2025, compared to a loss of $1.24 and an adjusted loss of $0.50 in Q3 2024[2]. - For the three months ended September 30, 2025, net sales increased to $1,944 million, compared to $1,833 million in the same period of 2024, representing a growth of 6.1%[42]. - The operating income for the three months ended September 30, 2025, was $512 million, a significant recovery from a loss of $113 million in the same period of 2024[42]. - The net income attributable to CVR Energy stockholders for the three months ended September 30, 2025, was $374 million, compared to a loss of $124 million in the same period of 2024[42]. - Adjusted EBITDA for the three months ended September 30, 2025, was $180 million, up from $63 million in the same period of 2024[42]. - Free cash flow for the three months ended September 30, 2025, was $121 million, compared to $13 million in the same period of 2024[44]. - Net income for Q3 2025 was $401 million, a significant recovery from a net loss of $122 million in Q3 2024[65]. - Adjusted EBITDA for Q3 2025 was $180 million, compared to $63 million in Q3 2024, indicating improved operational efficiency[65]. - Free cash flow for Q3 2025 was $121 million, up from $13 million in Q3 2024, reflecting better cash management[67]. Segment Performance - The Petroleum Segment achieved a net income of $520 million and EBITDA of $572 million in Q3 2025, compared to a net loss of $110 million and an EBITDA loss of $75 million in Q3 2024[4]. - The Nitrogen Fertilizer Segment reported net income of $43 million and EBITDA of $71 million on net sales of $164 million for Q3 2025, compared to net income of $4 million and EBITDA of $36 million on net sales of $125 million in Q3 2024[12]. - The Renewables Segment reported a net loss of $51 million and an EBITDA loss of $15 million in Q3 2025, compared to net income of $3 million and EBITDA of $9 million in Q3 2024[8]. - Total nitrogen fertilizer EBITDA for the nine months ended September 30, 2025, reached $191 million, compared to $129 million for the same period in 2024[74]. Operational Metrics - Combined total throughput for Q3 2025 was approximately 216,000 barrels per day, up from 189,000 barrels per day in Q3 2024[5]. - Refining margin for Q3 2025 was $708 million, or $35.65 per total throughput barrel, compared to $44 million, or $2.53 per barrel in Q3 2024[6]. - Total throughput for the petroleum segment increased to 215,968 bpd in Q3 2025, up from 189,294 bpd in Q3 2024[50]. - The total production for the petroleum segment reached 214,088 bpd in Q3 2025, compared to 188,290 bpd in Q3 2024, reflecting a utilization rate of 96.6%[51]. - The ammonia utilization rate for the nitrogen fertilizer segment was 95% for Q3 2025, slightly down from 97% in Q3 2024[57]. Cash and Debt Management - Consolidated cash and cash equivalents were $670 million at September 30, 2025, a decrease of $317 million from December 31, 2024[16]. - Cash and cash equivalents decreased to $670 million as of September 30, 2025, from $987 million as of December 31, 2024[43]. - Total debt and finance lease obligations decreased to $1,841 million as of September 30, 2025, from $1,919 million as of December 31, 2024[43]. - The corporate total debt and finance lease obligations were $1.0 billion as of September 30, 2025, compared to $996 million at the end of 2024[48]. Market Conditions - Average realized gate prices for ammonia and UAN increased by 33% and 52% respectively in Q3 2025, reaching $531 and $348 per ton[14]. - Natural gas costs increased to $3.18 per MMBtu in Q3 2025 from $2.19 per MMBtu in Q3 2024, impacting production costs[58]. - The average price of Chicago Board of Trade soybean oil was $0.53 per pound in Q3 2025, compared to $0.43 per pound in Q3 2024[56]. - The average NYMEX Crack Spread for Q3 2025 was $28.23, up from $21.03 in Q3 2024, indicating improved refining economics[53]. Future Outlook - The outlook for Q4 2025 includes ammonia utilization rates projected between 80% and 85% and direct operating expenses estimated between $58 million and $63 million[63]. - Total throughput for petroleum is expected to range from 200,000 bpd to 215,000 bpd in Q4 2025, with crude utilization rates between 92% and 97%[63]. - Capital expenditures for Q4 2025 are projected to be between $53 million and $67 million, with specific allocations for petroleum, renewables, and nitrogen fertilizer[63].

Core Insights - CVR Energy reported third quarter 2025 earnings per diluted share of $3.72, a significant improvement compared to a loss of $1.24 per diluted share in the same period last year [1] - Adjusted earnings per diluted share for the third quarter of 2025 were 40 cents, compared to an adjusted loss of 50 cents per diluted share in the prior year [1] - The company recognized a $488 million benefit from the EPA's decision in August 2025, which positively impacted its financial results [1]

Core Insights - The third-quarter earnings season has started strongly, particularly driven by the Finance sector, which has positively influenced equity markets despite ongoing economic challenges [1] - A weak labor market has led to increased expectations for the Federal Reserve to continue lowering the benchmark lending rate throughout 2025, further boosting investor sentiment [1] Investment Opportunities - Investors are encouraged to create portfolios aimed at solid returns, with broker recommendations serving as a valuable resource due to brokers' expertise in market dynamics [2] - Notable broker-friendly stocks to monitor include Par Pacific Holdings (PARR), Cooper-Standard (CPS), Bread Financial (BFH), American Airlines (AAL), and CVR Energy (CVI) for their rising estimates and strong fundamentals [2][6] Stock Screening Methodology - A screening process has been established to identify stocks based on improved broker recommendations and upward revisions in earnings estimates over the past four weeks, incorporating the price/sales ratio as a key valuation metric [3][4] - The screening criteria include identifying the top 75 companies with net upgrades, the top 10 stocks with earnings estimate revisions, and the bottom 10% of stocks based on the price/sales ratio [4][5] Company Highlights - Par Pacific Holdings operates an integrated energy platform with a refining capacity of 219,000 barrels per day and has consistently beaten earnings estimates [5][6] - Cooper-Standard is experiencing significant earnings growth, expected to rise by 137.8% year-over-year, driven by advancements in hybrid and electric vehicle technologies [7][8] - Bread Financial benefits from data-driven marketing strategies and solid growth in Card Services, with a Zacks Rank of 3 [8][9] - American Airlines is seeing increased air travel demand and low fuel costs, projecting a 0.5% revenue increase in 2025 [9][10] - CVR Energy is focused on renewable energy and has a Zacks Rank of 3, with a commitment to reducing carbon emissions [10][11]