Stock Focus: Western Refining (WNR)
Posted on June 17, 2008 in the Stocks category
.Western Refining, Inc., through its subsidiaries, operates as an independent crude oil refiner and marketer of refined products. In today’s rising crude market, you would think that all refining stocks would be performing well. Western Refining is the exception.
The problem is debt. WNR debt problems have caused the stock to fall almost 80% from its July 2007 highs and it has not reached bottom yet. At $13+ a share, Western Refining still trades at a significant premium to its peers on 2008 and 2009 EV/EBITA and Wall Street expects that a debt covenant will be broken in the coming weeks.
Soleil just initiated coverage of WNR with a sell rating and an $8 target noting WNR’s stock price has suffered a similar fate as some other refiners did in 2002 that financed acquisitions with debt and became highly levered heading into a sector downturn.
Western Refining Numbers
Beta: 1.18
Dividend & Yield: 0.24 (1.79%)
Earnings/Share: $2.01
Forward P/E: 8.90
Market Cap: 909.38 Mil
P/E: 6.70
Return on Equity: 21.05
Total Shares Out: 68.32 Mil
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