So, the last three quarters the consensus estimates was exceeded by more than 20%. Not sure Ive ever seen that. At some point, they need to stop doubting the fundementals, stop believing the sandbagging of management and bid this thing up to its income reality.
I do not think it has been that easy for analysts to come up with those estimates. There is no previous history except what COP put together prior to the split and the midstream & chemical JV's cloud the issue. The biggest problem is they blew it on the refining. But they do have refineries in high cost areas and I guess the analysts were not able to accurately access the value of moving low cost oil to them. Moving cheap Bakken even with the transportation cost must have been a huge benefit to the east coast refinery. The mid continent glut is a huge benefit to the gulf coast. The analysts also blew it big time on Valero.
I do not know if we get to $10. Taking the consensus estimate and bumping it 20% for a low forcast and then 10X I get around $90/share. I think we need a little more patience. I do see this company exploding to the upside. When I look at their JV's (I own both SE and CVX)and a new MLP, they will be able to invest without watering down the stock or borrowing. I think one thing that can drive the stock are both dividend increases and buy backs which the management has seemed to embrace. The midstream business is down now because of low NGL's prices. Ethane is really low and along with dry gas there has been a reduction by producers. I also own, OGE & OKE & MDU, which have midsteam gas assets and pipelines. The big shift in both fuels and NGL's for chemicals will eventually drive all these energy/chemical stocks through the roof. But short term there is a glut. AS you can see I love this whole industry. Am retired, bought my first stock in 1971 and worked in the utility industry for many years including operations and finance. I have the time and inclination and listen to all the conference calls.
OK, so those are the trends. You seem to understand it perfectly, and youre not being paid to analyize it. Either they start getting it right, and raise the estimates, or the market figures it out and starts place a rational PE ratio on the actual earnings potential. i can easily see a 9 PE on $10/share 2013/2014 earnings. that is a 90 pps if i did the math right.