HF Sinclair(US:DINO)2024-08-13 08:47Investment Rating - The report assigns a "Buy" rating for HF Sinclair Corp (DINO) with a 12-month price target adjusted to US$70.00 from the previous US$73.00 [1]. Core Insights - HF Sinclair Corp (DINO) provided guidance for 3Q24 throughput of 570-600 mb/d, accounting for turnarounds at the Parco and El Dorado refineries [1]. - The company has signed contracts to convert 150 stores to its branded wholesale sites, expecting growth of approximately 10% over the next 6 to 12 months [1]. - The renewable diesel business has become profitable in a low-margin environment, with DINO increasing utilization of pretreatment units and lowering operating costs [1]. - The Lubes business is projected to run at an EBITDA of US$350 million, with an EBITDA margin of 12-13% [1]. - DINO anticipates widening Canadian crude differentials in the next 12-24 months, with spot WTI-WCS already widening to US$15/bbl [1]. - The company is on track to exceed a 50% payout ratio as it continues to reward shareholders [1]. - Adjusted estimates reflect a decrease in EPS for 2024E to US$4.43 from US$5.18 and for 2025E to US$6.56 from US$7.11 [1]. Financial Summary - Revenues are projected to be US$32,031 million for 2024E, with a slight decrease to US$31,808 million in 2025E [2]. - EBITDA is expected to decline to US$1,970 million in 2024E, with a recovery to US$2,329 million in 2025E [2]. - Net earnings are forecasted at US$842 million for 2024E, increasing to US$1,160 million in 2025E [2]. - The diluted EPS is expected to be US$4.43 for 2024E, with a rise to US$6.56 in 2025E [2]. - The company’s net debt is projected to be US$1,866 million for 2024E, decreasing to US$1,739 million in 2025E [2].