PBF
PBF
Hold 2026-05-10
Model
DCF
Price at Report
$40.71
Base IV
$37.06
Bear IV
$6.14
Bull IV
$73.19
Entry Zone: 6-34 · Sell Above: 62
Bore Family Office
Valuation Report — PBF Energy (PBF) • May 10, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 8.90% • Current Price: $40.71
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
PBF Energy is one of the largest independent petroleum refiners in the United States, operating six high-complexity refineries with total throughput capacity of approximately 1,000,000 barrels per day. The company processes a diverse slate of crude oils into transportation fuels, heating oil, petrochemical feedstocks, lubricants, and other petroleum products. PBF's refineries are located in Delaware City (DE), Paulsboro (NJ), Toledo (OH), Chalmette (LA), Torrance (CA), and Martinez (CA) — giving it geographic diversification across PADDs 1, 2, 3, and 5. The company also operates logistics assets through its PBF Logistics subsidiary. PBF is currently recovering from a February 2025 fire at its Martinez refinery, which severely impacted 2025 results. Insurance proceeds of $894M have been received, and the refinery is expected to return to full operations in 2026.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Refining (East Coast) | $12,100M | 41% | -8.0% | 3.0% | Delaware City + Paulsboro; PADD 1 |
| Refining (Gulf Coast) | $7,600M | 26% | -5.0% | 4.0% | Chalmette; heavy sour crude advantage |
| Refining (West Coast) | $8,200M | 28% | +15.0% | 2.0% | Torrance + Martinez; CARB premium market |
| Logistics & Other | $1,432M | 5% | +3.0% | 25.0% | PBF Logistics; fee-based, stable |
| Blended Growth Rate | — | 100% | -0.2% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 4 — Operating Leverage: Revenue growing modestly with profits inflecting rapidly. The classic DCF sweet spot — FCF is reliable, growing, and well-anchored to analyst estimates.
Why this drives model selection: Classic DCF sweet spot — FCF inflecting and growing rapidly.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 5.7% | <8% weak |
| FCF Margin | -1.3% | <5% weak |
| Debt / EBITDA | 2.9x | 2–4x moderate |
| Revenue Trend | Mixed | 3-year directional trend |
| FCF Margin Trend | Contracting | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $27,253 | $46,830 | $38,325 | $33,115 | $29,332 |
| Rev YoY Growth | — | +71.8% | -18.2% | -13.6% | -11.4% |
| Gross Margin | 18.7% | 13.8% | 8.0% | -1.4% | -0.9% |
| EBITDA ($M) | $1,081 | $4,687 | $3,543 | $608 | $609 |
| EBITDA Margin | 4.0% | 10.0% | 9.2% | 1.8% | 2.1% |
| Operating Income ($M) | $597 | $4,153 | $2,952 | $-699 | $-54 |
| Operating Margin | 2.2% | 8.9% | 7.7% | -2.1% | -0.2% |
| Net Income ($M) | $231 | $2,877 | $2,141 | $-534 | $-159 |
| Net Margin | 0.8% | 6.1% | 5.6% | -1.6% | -0.5% |
| EPS (diluted) | $1.90 | $22.84 | $16.52 | $-4.60 | $-1.39 |
| Free Cash Flow ($M) | $228 | $4,139 | $679 | $-348 | $-783 |
| Annual DPS | $0.000 | $0.800 | $1.000 | $1.025 | $1.100 |
| Total Debt ($M) | $5,002 | $2,630 | $2,032 | $2,303 | $2,902 |
💹 Capital Return & Share Count Analysis
Net Share Change
+10.9% (2016→2025)
📈 Net dilution — issuances exceed buybacks
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2016 | 103.6M | — | — | — |
| 2017 | 113.9M | +9.9% | — | — |
| 2018 | 118.8M | +4.3% | — | — |
| 2019 | 121.9M | +2.6% | — | — |
| 2020 | 120.7M | -1.0% | — | — |
| 2021 | 122.6M | +1.6% | — | — |
| 2022 | 126.9M | +3.5% | $156 | 3.0% |
| 2023 | 130.5M | +2.8% | $533 | 10.0% |
| 2024 | 117.1M | -10.3% | $329 | 6.9% |
| 2025 | 114.9M | -1.9% | — | — |
PBF resumed buybacks in 2022 after a hiatus during 2020–2021. Repurchased $1.0B in 2022–24 before pausing in 2025 due to the Martinez fire and recovery spending. Shares declined from 130.5M (2023) to 114.9M (2025) — a 12% reduction. Buybacks are opportunistic, not systematic. Management has indicated they will resume when cash flow permits.
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.35% | 10-yr US Treasury yield |
| Beta (β) | 1.300 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 11.50% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 7.00% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 5.46% | × (1 − 22%) |
| Weight Equity (We) | 57.3% | Mkt cap $0.0B |
| Weight Debt (Wd) | 42.7% | Gross debt $0.0B |
| WACC | 8.90% | DCF discount rate |
📈 DCF Scenarios
$6
🔴 Bear
$37
📊 Base
$73
🚀 Bull
$40.71
Current Price
$37
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 3.0% | 2.0% | 1.5% | 10.40% | $6 | ▼84.9% |
| 📊 Base | 6.0% | 3.0% | 2.5% | 8.90% | $37 | ▼9.0% |
| 🚀 Bull | 8.0% | 4.0% | 2.5% | 7.90% | $73 | ▲79.8% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 3.0% | Stage 2: 2.0% | Terminal: 1.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.28B | $0.25B | $0.25B |
| Year 2 ✦ | Stage 1 | $0.30B | $0.25B | $0.50B |
| Year 3 ✦ | Stage 1 | $0.33B | $0.24B | $0.75B |
| Year 4 ✦ | Stage 1 | $0.34B | $0.23B | $0.98B |
| Year 5 ✦ | Stage 1 | $0.36B | $0.22B | $1.20B |
| Year 6 | Stage 2 | $0.37B | $0.20B | $1.40B |
| Year 7 | Stage 2 | $0.37B | $0.19B | $1.59B |
| Year 8 | Stage 2 | $0.38B | $0.17B | $1.76B |
| Year 9 | Stage 2 | $0.39B | $0.16B | $1.92B |
| Year 10 | Stage 2 | $0.40B | $0.15B | $2.07B |
| Terminal | — | TV=$4.5B | PV(TV)=$1.7B (45% of EV) | EV=$3.8B |
| Intrinsic Value | — | — | EV $3.8B − Net Debt → Equity / Shares | $6 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (10.40%) to get its present value. After Year 10, FCF grows at the terminal rate (1.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $4.5B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $1.7B). Enterprise Value = PV of FCFs ($2.1B) + PV of TV ($1.7B) = $3.8B. Subtracting net debt gives equity value of $0.7B, divided by shares outstanding = $6 per share.
Base Scenario
Stage 1: 6.0% | Stage 2: 3.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.35B | $0.32B | $0.32B |
| Year 2 ✦ | Stage 1 | $0.40B | $0.34B | $0.66B |
| Year 3 ✦ | Stage 1 | $0.45B | $0.35B | $1.01B |
| Year 4 ✦ | Stage 1 | $0.49B | $0.35B | $1.36B |
| Year 5 ✦ | Stage 1 | $0.53B | $0.34B | $1.70B |
| Year 6 | Stage 2 | $0.54B | $0.32B | $2.02B |
| Year 7 | Stage 2 | $0.56B | $0.31B | $2.33B |
| Year 8 | Stage 2 | $0.57B | $0.29B | $2.62B |
| Year 9 | Stage 2 | $0.59B | $0.27B | $2.89B |
| Year 10 | Stage 2 | $0.61B | $0.26B | $3.15B |
| Terminal | — | TV=$9.7B | PV(TV)=$4.2B (57% of EV) | EV=$7.3B |
| Intrinsic Value | — | — | EV $7.3B − Net Debt → Equity / Shares | $37 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.90%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $9.7B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $4.2B). Enterprise Value = PV of FCFs ($3.2B) + PV of TV ($4.2B) = $7.3B. Subtracting net debt gives equity value of $4.3B, divided by shares outstanding = $37 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 8.0% | Stage 2: 4.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.45B | $0.42B | $0.42B |
| Year 2 ✦ | Stage 1 | $0.53B | $0.45B | $0.87B |
| Year 3 ✦ | Stage 1 | $0.58B | $0.46B | $1.33B |
| Year 4 ✦ | Stage 1 | $0.62B | $0.46B | $1.79B |
| Year 5 ✦ | Stage 1 | $0.67B | $0.45B | $2.25B |
| Year 6 | Stage 2 | $0.69B | $0.44B | $2.68B |
| Year 7 | Stage 2 | $0.72B | $0.42B | $3.11B |
| Year 8 | Stage 2 | $0.75B | $0.41B | $3.51B |
| Year 9 | Stage 2 | $0.78B | $0.39B | $3.91B |
| Year 10 | Stage 2 | $0.81B | $0.38B | $4.28B |
| Terminal | — | TV=$15.4B | PV(TV)=$7.2B (63% of EV) | EV=$11.5B |
| Intrinsic Value | — | — | EV $11.5B − Net Debt → Equity / Shares | $73 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.90%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $15.4B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $7.2B). Enterprise Value = PV of FCFs ($4.3B) + PV of TV ($7.2B) = $11.5B. Subtracting net debt gives equity value of $8.4B, divided by shares outstanding = $73 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.9% | $47 | $52 | $58 | $65 | $75 |
| 7.4% | $41 | $44 | $49 | $55 | $62 |
| 7.9% | $35 | $38 | $42 | $46 | $52 |
| 8.4% | $30 | $33 | $36 | $40 | $44 |
| 8.9% | $26 | $29 | $31 | $34 | $37 |
| 9.4% | $23 | $25 | $27 | $29 | $32 |
| 9.9% | $20 | $21 | $23 | $25 | $27 |
| 10.4% | $17 | $18 | $20 | $22 | $23 |
| 10.9% | $15 | $16 | $17 | $18 | $20 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E | EV/EBITDA | P/FCF | Div Yield | Notes |
|---|---|---|---|---|---|---|
| Valero Energy | VLO | 10.2x | 5.8x | 14.1x | 1.6% | Largest US independent refiner |
| Marathon Petroleum | MPC | 12.1x | 6.5x | 11.3x | 2.1% | Integrated; midstream MLP |
| Phillips 66 | PSX | 11.8x | 7.2x | 13.5x | 2.4% | Integrated; chemicals + midstream |
| HF Sinclair | DINO | 8.9x | 5.1x | 9.8x | 3.2% | Smaller refiner; renewables exposure |
| PBF Energy | PBF | 11.0x | 5.0x | NM | 2.7% | Pure-play refiner; Martinez recovery |
| PBF 5-yr average | — | 7.2x | 4.1x | 8.5x | 1.8% | Historical average (incl. loss years) |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $1.100 |
| Current Yield | 2.70% |
| Consecutive Growth Years | 3 |
| 1-yr DPS CAGR | N/A |
| 3-yr DPS CAGR | N/A |
| 5-yr DPS CAGR | N/A |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 29.0% |
| FCF Payout Ratio | -27.0% |
| Sustainability Verdict | ⚠️ Watch — cyclical earnings make FCF payout unreliable; dividend maintained through trough but vulnerable to extended downturns |
PBF's $1.10 annual dividend (2.7% yield) is 3 years old and growing, but sits atop deeply cyclical earnings. The 29% payout ratio on TTM EPS looks conservative, but TTM FCF is negative, and the FCF payout ratio is not meaningful in a trough year. At mid-cycle earnings (EPS $5–10), the payout ratio would be 11–22% — very safe. The dividend survived both 2024 and 2025 troughs, which is a positive signal. However, an extended downturn could force a cut. Watch: if crack spreads stay below $10/bbl for 2+ quarters, the dividend is at risk.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $1.90 | — | — | — | Actual |
| 2022 | $22.84 | — | — | — | Actual |
| 2023 | $16.52 | — | — | — | Actual |
| 2024 | $-4.60 | — | — | — | Actual |
| 2025 | $-1.39 | — | — | — | Actual |
| 2026 | $-0.16 | $5.20 | $10.09 | 14 | Estimate |
| 2027 | $2.74 | $4.81 | $9.87 | 14 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $27.3B | — | — | — | Actual |
| 2022 | $46.8B | — | — | — | Actual |
| 2023 | $38.3B | — | — | — | Actual |
| 2024 | $33.1B | — | — | — | Actual |
| 2025 | $29.3B | — | — | — | Actual |
| 2026 | $26.8B | $34.2B | $40.7B | 14 | Estimate |
| 2027 | $26.3B | $32.7B | $40.7B | 14 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Randy Ollenberger | BMO Capital | Hold | $50 | +22.8% |
| Nitin Kumar | Mizuho | Hold | $45 | +10.5% |
| Vikram Bagri | Citigroup | Hold | $43 | +5.6% |
| Ryan Todd | Piper Sandler | Buy | $42 | +3.2% |
| Neil Mehta | Goldman Sachs | Hold | $41 | +0.7% |
| Jason Gabelman | TD Cowen | Strong Sell | $36 | -11.6% |
| Connor Lynagh | Morgan Stanley | Sell | $34 | -16.5% |
| Betty Zhang | Scotiabank | Hold | $34 | -16.5% |
| Doug Leggate | Wolfe Research | Sell | $23 | -43.5% |
💡 Investment Thesis
- Refining cycle inflection: Q1 2026 EPS of $1.65 crushed estimates (-$0.71 expected), signaling the trough may be behind us. Crack spreads are recovering as global refining capacity contracts and product demand remains resilient.
- Martinez recovery catalyst: The Feb 2025 fire knocked out PBF's largest West Coast refinery. Full restart expected mid-2026 will restore ~190K bpd of high-margin CARB production, providing a significant earnings step-up.
- Deep value on cyclical metrics: At ~0.16× sales, 0.87× book, and 11× TTM EPS (which includes loss quarters), PBF trades at a deep discount to replacement cost. When refining margins normalize, earnings power is $5–10 EPS.
- Balance sheet repair underway: Net debt/EBITDA has improved from peak leverage, and insurance proceeds ($894M) provide a cash cushion. Buybacks resumed in 2023–24 before pausing in 2025 for Martinez recovery.
- Risk — it's a cyclical: Earnings can go negative in trough years (FY2024: -$4.60 EPS, FY2025: -$1.39 EPS). This is not a buy-and-hold-forever stock — it's a cycle trade. Position sizing and entry price matter enormously.
👔 Management Quality & Culture
CEO: Thomas Nimbley · Tenure: Since 2015 (~11 yrs) · ★ Founder
⚠️ Key-Person Risk: HIGH
Founder-led company — strategy and culture deeply tied to a single individual. Succession planning is a material risk.
Net Insider Buys (12m)
-13,593,509 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
PBF Energy Inc. - Governance - Board of Directors
COLIN MURRAY Vice President, Investor Relations · Call PBF Energy at +1 973 455 7578 Email PBF Energy at ir@pbfenergy.com
COLIN MURRAY Vice President, Investor Relations · Call PBF Energy at +1 973 455 7578 Email PBF Energy at ir@pbfenergy.com
PBF Energy Inc. (PBF) Leadership & Management Team Analysis
PBF Energy's CEO is Matt Lucey, appointed in Jan 2015, has a tenure of 11.17 years. total yearly compensation is $7.89M, comprised of 15.8% salary and 84.2% bonuses, including company stock and options. directly owns 0
PBF Energy's CEO is Matt Lucey, appointed in Jan 2015, has a tenure of 11.17 years. total yearly compensation is $7.89M, comprised of 15.8% salary and 84.2% bonuses, including company stock and options. directly owns 0
PBF Energy Inc. - Executive Bio, Top Executies, and Transiti
PBF Energy Inc., through its subsidiaries, engages in refining and supplying petroleum products. ... Matthew C. Lucey ... Biography: Matthew C. Lucey has served as PBF's President and Chief Executive Officer and a member of the Board o
PBF Energy Inc., through its subsidiaries, engages in refining and supplying petroleum products. ... Matthew C. Lucey ... Biography: Matthew C. Lucey has served as PBF's President and Chief Executive Officer and a member of the Board o
Capital Allocation & Strategy
PBF Energy Inc. (PBF) Leadership & Management Team Analysis
Learn about PBF Energy Inc. (PBF) stock's management team. Comprehensive performance, salary and tenure analysis for the CEO, board and leadership team.
Learn about PBF Energy Inc. (PBF) stock's management team. Comprehensive performance, salary and tenure analysis for the CEO, board and leadership team.
Who Owns PBF Energy Company? – MatrixBCG.com
Single-class common stock gives each share one vote; nine directors balance executive and independent perspectives. Institutional blocks drove outcomes on capital allocation and disclosure in 2024–2025.
Single-class common stock gives each share one vote; nine directors balance executive and independent perspectives. Institutional blocks drove outcomes on capital allocation and disclosure in 2024–2025.
Employee Ratings
Overall Rating
3.8/5 ★★★★☆
Culture Signal
Positive
✅ Strengths
- good pay
Employee Review Excerpts
PBF Energy Reviews: Pros And Cons of Working At PBF Energy |
Poor planning from management. Reactive culture rather than proactive. ... Sr. Scheduler ... Does PBF Energy pay their employees well?According to anonymously submitted Glassdoor reviews, PBF Energy employees rate their compensation and ben
Poor planning from management. Reactive culture rather than proactive. ... Sr. Scheduler ... Does PBF Energy pay their employees well?According to anonymously submitted Glassdoor reviews, PBF Energy employees rate their compensation and ben
PBF Energy - Good | Glassdoor
Favoritism, lack of formal training, poor work life balance. Compensation is sub par to competitors. Poor planning from management. Reactive culture rather than proactive.
Favoritism, lack of formal training, poor work life balance. Compensation is sub par to competitors. Poor planning from management. Reactive culture rather than proactive.
PBF Energy - Bad culture | Glassdoor
The pay is very good
The pay is very good
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DCF Verdict: Hold — PBF Energy (PBF)
Current price: $40.71 | Analyst Avg PT: $36.83
$6
🔴 Bear
$37
📊 Base
$73
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$34 | Begin position |
| Tier 2 — Add | ≤$22 | Add on weakness |
| Tier 3 — Full | ≤$6 | Full allocation |
| Sell Alert | ≥$62 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
PBF is a cyclical refining play at a potential inflection point. The Q1 2026 earnings blowout suggests the refining cycle is turning, and Martinez recovery will add further earnings power in 2H 2026. However, this remains a cycle trade — PBF is not suitable for a permanent hold. Initiate a starter position at current levels with a plan to add on weakness below $35. Trim aggressively above $50, where refining margins would need to sustain 2022-like peaks to justify.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 579.86 |
| Average Cost Basis | $37.49 |
| Current Market Value | $23,606 |
| Unrealized P&L | $+1,867 (+8.6%) |
| Annual DPS | $1.100/yr |
| Annual Dividend Income | $638/yr |
| Current Yield (at price) | 2.70% |
| Yield on Cost | 2.93% |
| vs Target (~$200K) | $23,606 / $200,000 (12%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Normalization | PBF's FCF is extremely volatile: $4.1B in 2022 (record crack spreads), -$783M in 2025 (Martinez fire). Using normalized $350M base — mid-cycle without extraordinary margins or catastrophic events. This aligns with analyst FY2026 EBITDA estimates of ~$1.4–1.5B and CapEx of $650–700M, implying FCF of $400–600M at normal margins. The $350M base is conservative, reflecting the risk that PBF may not sustain mid-cycle margins throughout the projection period. |
| Beta & WACC | Finnhub reports PBF beta as 0.12, which is clearly incorrect for a highly cyclical refiner (PBF's stock has moved >110% in the past year). Using 1.30 based on observed volatility and refining sector beta. This gives Ke = 11.50%. Base WACC = 8.9% (equity weight 57.3% at Ke=11.50%, debt weight 42.7% at Kd=5.46% after-tax). Bear WACC = 10.4% (cyclical risk premium), Bull WACC = 7.9% (favorable cycle reduces risk). |
| Bear Case Floor | The Bear DCF produces $6/share, which is below book value of $47.83/share. In practice, PBF has a tangible asset floor: 6 refineries with 1M bpd capacity have significant replacement value. The $6 Bear case represents a scenario of persistent losses that would be unsustainable and would likely trigger asset sales, restructuring, or acquisition at a premium to the DCF. The true floor is closer to tangible book value ($48/share). This is a cyclical — the Bear DCF is useful directionally but underestimates the liquidation/asset value floor. |
| Oil/Energy Adjusted Quality Rubric | Standard corporate quality scorecard applied with cycle-aware adjustments: PBF scores poorly on FCF margin (-1.3% TTM) and FCF trend (declining) because we are in a cyclical trough. These metrics will normalize as crack spreads recover. Debt/EBITDA of 2.9x is moderate for a refiner. The key quality signal is balance sheet strength through the cycle — PBF survived 2020 and 2024–25 troughs without cutting the dividend or violating covenants. |
| Sanity Check | Base IV of ~$37 aligns closely with analyst consensus PT of $36.83 (within 1%). PBF at mid-cycle should trade at 5–6× EBITDA, which implies $38–46 share value — consistent with both our model and analyst targets. The wide Bear/Bull spread ($6–$73) reflects the extreme cyclicality of refining earnings, which makes PBF more of a cycle-timing play than a buy-and-hold compounder. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.