A strong third-quarter performance for
CVR Energy Inc.
) sent all earnings estimates higher on the petroleum refiner in
the past 30 days. This Zacks #1 Rank (Strong Buy) also hit its
52-week high on November 29. In addition, CVR Energy has a
compelling valuation and is a true value pick with a price-to-book
(P/B) ratio of 2.4, a price-to-sales (P/S) ratio of 0.5 and a
price-to-earnings (P/E) ratio of 6.4.
Stellar Q3 Results
On November 5, CVR Energy reported stellar third quarter adjusted
earnings of $2.95 per share that exceeded the Zacks Consensus
Estimate by 29.4%. The result also surged 90.3% from last year. The
outperformance was led by strong operating performances across all
Total revenue surged 78.2% to $2,409.6 million in the quarter from
last year's $1,352.0 million, which also surpassed the Zacks
Consensus Estimate of $2,161.0.
Earnings Momentum Trending Higher
All 4 earnings estimates for 2012 have moved north over the past 30
days, lifting the Zacks Consensus Estimate by 13.2% to $7.14 per
share. For 2013, the Zacks Consensus Estimate increased 15.2% to
$5.77 over the same period as all 4 earnings estimates moved
The company has a price-to-book (P/B) ratio of 2.4 and a
price-to-sales (P/S) ratio of just 0.5. In addition, its forward
price-to-earnings (P/E) multiple of 6.4 is lower than the peer
group average of 8.0. A P/E below 15.0, a P/S ratio less than 1.0
and a P/B ratio under 3.0 generally indicate value.
CVR Energy has a trailing 12-month ROE of 41.4%, compared with the
peer group average of 20.9%. This suggests that the company invests
its earnings better than industry rivals. The stock also looks
attractive with respect to its trailing 12-month return on assets
(ROA) of 17.6% and return on investment (ROI) of 25.8%, which are
above the peer group averages of 7.3% and 15.1%, respectively.
A Look at Chart
Shares of CVR Energy have been trading above the 50-day and
200-days moving averages. In particular, the continuous uptrend in
stock prices and the ever increasing gap between the share price
and the moving average since mid November indicate a bullish trend.
The year-to-date return for the stock is 144.1% compared with the
S&P 500 return of just 12.6%.
Headquartered in Sugar Land, Texas, CVR Energy, Inc. is an
independent refiner with more than 185,000 barrels per day of
processing capacity in the Mid-continent United States. With its
subsidiaries and affiliated businesses, the company operates
independent refining assets in Coffeyville, Kansas, and Wynnewood,
Oklahoma. CVR Energy also remains engaged in marketing high value
transportation fuels to customers through tanker trucks and
pipeline terminals, and a crude oil gathering system serving
Kansas, Missouri, Oklahoma, Nebraska and Texas. Through a limited
partnership - CVR Partners, L.P. (UAN), - it acts as a producer of
ammonia and urea ammonium nitrate, or UAN, fertilizers.
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