Integrated Oil "Refiners and Oil Sands - The Momentum Trade" Gupta

Research evidence excerpt

Integrated Oil "Refiners and Oil Sands - The Momentum Trade" Gupta

Valuation Method and Risk Statement

Risks - Economic recession could impact demand for refined products, which in-turn will lead

to lower margins. Higher D6 (ethanol RIN) prices would impact refining margin capture.

Weaker ethylene chain margins would be headwind to Chemical earnings. Higher feedstock

prices (animal tallow, used cooking oil) driving lower renewable diesel margins. Higher RD

feedstock prices (animal tallow, used cooking oil) would drive lower renewable diesel

margins.

Marathon Petroleum Corporation:

Our target price of $170 is based on 7.9x (NTM) our $10,345M CY26 EBITDA, less net debt,

less NCI, which equals $170/shr.

Downside risk. Economic recession could impact demand for refined products, which in-turn

will lead to lower margins. Higher natural has prices will have negative impact on operating

cost. Lower credit prices (D4 RIN and LCFS) driving lower renewable diesel margins. Natural

disasters / natural calamity (flood, earthquakes, tornadoes) could temporarily impact refining

operations.

HF Sinclair Corp:

Our price target of $55 is based 6.25x (NTM) our $1,837M CY26E EBITDA, less net debt, less

NCI. Risks: Lower Cracks in Mid-Con, MidWest and West Coast. Unplanned downtime.

Narrower WTI and WCS diffs.

Phillips 66:

Our target price is based on multiples analysis.

Risks. Economic recession could impact demand for refined products, which in-turn will lead

to lower margins.Higher D6 (ethanol RIN) prices would impact refining margin capture.

Valero Energy Corp:

Our target price of $160 is based on 7.35x (NTM) our $7,773M CY26 EBITDA, less net debt,

less NCI, which equals $160/shr.

Downside risk. Economic recession could impact demand for refined products, which in turn