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HollyFrontier’s Q4 2018 Estimates: Ranked First

Michelle Rey
HollyFrontier’s Q4 2018 Estimates: Ranked First

MPC, VLO, HFC, and PSX: Q4 Estimates and Rankings(Continued from Prior Part)## Estimated performanceIn this series, we’re ranking four US refiners—Marathon Petroleum (MPC), HollyFrontier (HFC), Valero Energy (VLO), and Phillips 66 (PSX)—based on their estimated earnings growth YoY (year-over-year) in the fourth quarter. HollyFrontier is first with a massive jump in its earnings, while Valero Energy is last. Phillips 66 and Marathon Petroleum occupy the second and third spots, respectively.## HollyFrontier’s fourth-quarter estimatesAccording to analysts, HollyFrontier is expected to post an EPS of $1.7 in the fourth quarter—144% higher than its adjusted EPS in the fourth quarter of 2017. The EPS is 14% lower compared to the adjusted EPS in the third quarter. HollyFrontier’s revenues are estimated to be ~$4.5 billion in the fourth quarter—12% higher than the revenues in the fourth quarter of 2017.HollyFrontier’s refining margins could be lower in the fourth quarter due to weaker refining conditions YoY in its main operating region—Midcon. In the Rockies and Southwest, the index values rose YoY in the fourth quarter. Midcon accounted for 59% of the company’s total crude throughput in the third quarter. The refining index value in Midcon has fallen from $18.7 per barrel in the fourth quarter of 2017 to $14.8 in the fourth quarter.Overall, the regional index values suggest that HollyFrontier’s refining margin could fall YoY due to the lower Midcon margin. The fall could be partially offset by higher Rockies and Southwest margins in the fourth quarter.Renewable identification number prices have declined during the quarter, which could give the company a break from compliance costs. HollyFrontier’s Lubricants and Midstream segments could support the company’s earnings growth in the fourth quarter.Next, we’ll discuss Phillips 66’s fourth-quarter earnings estimate.Continue to Next PartBrowse this series on Market Realist: * Part 1 - MPC, VLO, HFC, and PSX: Q4 Estimates and Rankings * Part 3 - Phillips 66’s EPS Is Expected to Increase 126% in Q4 2018 * Part 4 - Marathon Petroleum’s Earnings Could Rise 25% in Q4 2018