Zacks Investment Research downgraded
CVR Refining, LP
) to a Zacks #5 Rank (Strong Sell) on Oct 5.
CVR REFINING LP (CVRR): Free Stock Analysis
ENBRIDGE ENERGY (EEQ): Free Stock Analysis
PIONEER EGY SVC (PES): Free Stock Analysis
TRANSGLOBE ENGY (TGA): Free Stock Analysis
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Why the Downgrade?
CVR Refining has witnessed sharp downward estimate revisions
after reporting disappointing second-quarter 2013 results. Shares
of this independent downstream energy limited partnership have
been on a downtrend since the beginning of August and has more
Earlier second-quarter earnings were partially aided by reduction
in a 6.9% increase in sales, selling, general &
administrative expenses (down 16.2% year over year) and interest
expense (down 34.4%). However, these positives were more than
offset by a 6.6% increase in depreciation and amortization as
well as a 3.4% increase in direct operating expense, on a year
over year basis.
Though CVR Refining's capital ratios remained strong and exceed
all regulatory requirements, credit quality showed deterioration
with net charge offs increasing 13 basis points (bps) year over
year to 0.22% and the allowance for loan losses increasing 39 bps
to 1.50% of total loans as of Sep 30, 2012.
The Zacks Consensus Estimate for 2014 decreased 17.3%
year-over-year to $3.99 per share. For 2014, most of the
estimates were revised downward over the last 60 days, sinking
the Zacks Consensus Estimate by 21.2% to $4.57 per share.
Other Stocks to Consider
Not all oil stocks are performing as poorly as CVR Refining.
Other stocks to watch out for in the industry are
Pioneer Energy Services Corp.
TransGlobe Energy Corp.
Enbridge Energy Management LLC
), each with a Zacks Rank #1 (Strong Buy).