PBF Energy Is Now Undervalued: Is This a Strong Entry Point?
PBF Energy PBF is trading at 1.91x trailing 12-month Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA), which is a discount compared with the broader industry average of 4.60x. Valero Energy Corporation VLO and Phillips 66 PSX are valued at 4.44x and 6.93x, respectively.
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PBF is now undervalued, but should investors dive in? Before concluding, one should explore the ongoing refining business landscape and the overall business outlook.
PBF Energy’s Bright Refining Business Outlook
PBF Energy is well-positioned to benefit from the shortage of gasoline, diesel and other fuels in global markets. During its third-quarter 2026earnings call management highlighted that refineries worldwide, with a combined production capacity of more than 5 million barrels per day, remain shut down. Global fuel inventories are also much lower than before the war, making it difficult to meet demand. Damaged refineries will take time to repair, while the closure of several other refineries over the years has further reduced fuel supplies. As a result, fuel prices and refining margins are likely to remain favorable. PBF stands to benefit from these conditions, particularly because its coastal refineries serve markets that depend heavily on imported fuels.
Renewable Diesel Diversification Boosts PBF’s Earnings
PBF Energy's investment in St. Bernard Renewables (“SBR”) provides an additional source of income alongside its traditional refining business. Management highlighted that the renewable diesel business is benefiting from strong margins, higher renewable fuel credit prices and favorable feedstock economics. The company mentioned that SBR is expected to produce in the range of 18,000-20,000 barrels of renewable diesel per day in the fourth quarter. These favorable conditions are expected to support its profitability and contribute positively to PBF's overall earnings.
Moreover, PBF has a strong balance sheet. The company’s debt-to-capitalization of 20.85% is much lower than the industry’s 39.3% and hence is capable of relying on its strong financials when the business environment turns unfavorable.
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Should Investors Bet on the Stock?
All the positive developments are yet to be reflected in the price chart, as over the past year PBF gained 70.2%, underperforming the industry’s 91.3% improvement. PSX and VLO jumped 81.6% and 97.5%, respectively, over the same time span.
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Given the backdrop, it would be ideal to make an entry into an undervalued stock like PBF when the business outlook looks outstanding. Currently, the stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
