A Fresh Look at HF Sinclair (DINO) Valuation Following Turnaround Earnings and Expansion Strategy

HF Sinclair (DINO) just delivered a big turnaround in its third-quarter earnings, swinging to a profit and growing its sales over last year. Alongside the results, the company is taking steps to expand its refined products infrastructure across the western US. The goal is to address changing market dynamics and set up for long-term growth.

See our latest analysis for HF Sinclair.

Investors have taken notice of HF Sinclair’s turnaround, with the share price climbing over 26% in the last three months and delivering a year-to-date share price return of almost 56%. The company’s major buyback and expansion announcements have helped fuel positive momentum, and while the 1-year total shareholder return lands just below 38%, long-term holders have benefited from a 191% total return over five years. This demonstrates that market sentiment has truly turned upward.

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With such robust recent gains and clear signals of renewed growth, the question now is whether HF Sinclair remains undervalued or if the market has already priced in the company’s brighter outlook. Is there still a buying opportunity, or has future growth been factored into today’s share price?

Most Popular Narrative: 6.9% Undervalued

With the most-followed narrative estimating HF Sinclair’s fair value at $58.80 per share and the last close at $54.73, the narrative points to some remaining upside. This difference draws attention to key assumptions driving the analysts' outlook.

“Disciplined capital returns, share buybacks, and balance sheet strength position the company for sustained earnings per share growth and increased shareholder value. The company's continued ramp-up in renewable diesel operations, improved access to government credits (such as the Producer's Tax Credit and LCFS), and expectation for improving regulatory pricing should provide incremental EBITDA and top-line growth as the renewable fuels market strengthens.”

Read the complete narrative.

Curious which bold assumptions power this fair value? The real story lies in future profit margins, buyback impact, and a growth forecast you won’t expect. Only by reading the full narrative will you uncover the catalysts pushing this value higher.

Result: Fair Value of $58.80 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, accelerating electric vehicle adoption and lagging progress in renewables could curb demand for traditional fuels and present challenges to HF Sinclair’s growth story.

Find out about the key risks to this HF Sinclair narrative.

Another View: What Does the SWS DCF Model Say?

While analyst narratives point to HF Sinclair trading below fair value, our DCF model suggests a very different picture. According to the SWS DCF model, the shares are actually trading well above intrinsic value. This signals possible overvaluation if long-term cash flow growth falls short. Could this gap signal an impending market reality check, or does it merely reflect short-term momentum?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out HF Sinclair for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 875 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own HF Sinclair Narrative

If you see the data differently, or want to investigate your own angles, you can craft your own analysis in just a few minutes. Do it your way

A great starting point for your HF Sinclair research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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