Still Constructive Large Cap Refining with 13% Average Upside to 2027 Consensus EPS; Buy MPC, VLO, DINO

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Still Constructive Large Cap Refining with 13% Average Upside to 2027 Consensus EPS; Buy MPC, VLO, DINO

Goldman Sachs Americas Energy: Oil - Refining

Exhibit 5: As detailed by GS commodities team, US refiners likely have limited capacity to raise diesel yields further

supporting the tight market and elevated margin environment

Source: EIA, Goldman Sachs Global Investment Research

HF Sinclair

Key Questions Heading Into Earnings: What are the latest updates around (1) recent

management changes and broader strategic initiatives and (2) small refinery

exemptions?

GS Outlook. For DINO (updated PT of $109/sh), we maintain a bullish view on the stock

where we highlight the company’s SRE optionality, balance sheet strength, and leverage

to niche refining markets in the Mid-Con and the West Coast Rockies. Furthermore, we

anticipate the Lubricants and Renewable Diesel businesses to see significant earnings

inflections in the near-term driven by tighter supply/demand dynamics. With that said,

we also anticipate DINO to provide updated commentary on the upcoming conference

call around broader strategic initiatives following recent leadership changes. Looking

ahead, we continue to monitor for updates around (a) the outlook for capture rates and

refining margins, (b) capital allocation priorities, (c) SREs on the go-forward, (d)

non-refining earnings contributions, and (e) clarity on the upcoming CEO/CFO

management transition.

Model Updates. We update our model to better reflect updated commodity prices

across refining, lubricants, and renewable fuels where we mark-to-market commodity

prices and the company’s market indicators. Additionally, we incorporate our updated

crack spread and RIN assumptions in the outer years while also making tweaks to