CVR - JPM 2022 refining outlook - PSX up CVI down

JPMorgan analyst Gresh appears to be biding time with his refinery ratings, as he is now overweight the three largest, most diverse refiners ((NYSE:VLO), (NYSE:MPC), (NYSE:PSX)) and underweight the smallest, pure-play refiners ((NYSE:CVI), (NYSE:DK), (NYSE:PBF)) With the sector trading below a 7% free cash flow yield on his numbers in 2022e, it's likely the Analyst is pushing clients towards the upstream sector, where he sees US and Canadian integrated companies trading at a 16% free cash flow yield next year on a $75 Brent oil price assumption In today's note, Gresh downgrades CVI (NYSE:CVR) noting strong performance YTD (+38% vs buy-rated peers VLO / MPC / PSX up 25% / 55% / 3%) Additionally, mid continent refiners like CVR have historically benefitted from discounted feedstocks coming out of the Permian basin; however, with better supply discipline from producers and additional offtake capacity from the basin, Gresh forecasts a historically narrow spread

For further details see:

JPM 2022 refining outlook - PSX up, CVI down