Is It Too Late to Consider Par Pacific Holdings After Its 2024 Share Price Surge?

• If you are wondering whether Par Pacific Holdings is still worth buying after its big run, you are not alone. This article is going to unpack what the current price really implies.
• The stock has cooled slightly over the last week, down 4.3%, but it is still up 16.1% over 30 days, 161.8% year to date, and 171.9% over the past year. This naturally raises questions about how much upside is left versus how much risk has been priced in.
• Recent moves have been driven by a mix of refining margin optimism and investor interest in companies with strategically located assets, especially along key US and Pacific energy corridors. In addition, headlines around fuel demand resilience and infrastructure investment have kept Par Pacific on the radar of investors looking for cyclical exposure with a growth angle.
• Right now, Par Pacific scores a 4/6 valuation check, suggesting it screens as undervalued on most of our metrics. Next we will break down what that looks like under different valuation approaches, before circling back at the end to another way to judge whether the current price really makes sense.

Par Pacific Holdings delivered 171.9% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry.

Approach 1: Par Pacific Holdings Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future, then discounting those cash flows back to the present.

For Par Pacific Holdings, the latest twelve month Free Cash Flow is about $224.1 Million, and analysts expect cash flows to stay solid but gradually normalize as refining conditions cool. Simply Wall St uses analyst forecasts out to 2027, where Free Cash Flow is projected at roughly $159 Million, and then extrapolates a slower growth path through 2035, with projected Free Cash Flow around $145.9 Million in 10 years. These future cash flows are then discounted using a 2 Stage Free Cash Flow to Equity model to arrive at an intrinsic value.

On this basis, the estimated fair value is $58.83 per share, which suggests the stock trades at roughly a 25.7% discount to its DCF value, so it currently screens as undervalued on cash flow grounds.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Par Pacific Holdings is undervalued by 25.7%. Track this in your watchlist or portfolio, or discover 906 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Par Pacific Holdings.

Approach 2: Par Pacific Holdings Price vs Earnings

For profitable companies like Par Pacific, the price to earnings ratio is a practical way to gauge whether investors are paying a reasonable price for each dollar of profit. Higher growth and lower perceived risk usually justify a higher PE multiple, while slower or more volatile businesses tend to trade on lower ratios.

Par Pacific currently trades on a PE of about 9.3x, which is below both the broader Oil and Gas industry average of around 13.8x and the peer group average of roughly 22.9x. On the surface, that discount hints that the market is either more cautious about Par Pacific or has not fully repriced its recent performance.

Simply Wall St also calculates a Fair Ratio of 9.1x for Par Pacific, a proprietary estimate of what the PE should be given its earnings growth profile, profit margins, industry, market cap and risk factors. This is more tailored than a simple comparison with peers or the industry, because it adjusts for the company’s own fundamentals rather than assuming it should trade in line with averages. With the current PE of 9.3x sitting very close to the Fair Ratio of 9.1x, the stock appears roughly in line with what its fundamentals justify.

Result: ABOUT RIGHT

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Upgrade Your Decision Making: Choose your Par Pacific Holdings Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply the stories investors tell about a company, connecting their view of its strategy, risks and opportunities to concrete forecasts for future revenue, earnings, margins and ultimately a fair value estimate.

On Simply Wall St, Narratives live in the Community page and are designed to be an easy, visual way for millions of investors to link a company’s story to a set of numbers. They can then compare the Fair Value implied by that story to the current share price to decide whether they see a buy, hold or sell opportunity.

Because Narratives update dynamically as new information comes in, such as earnings results or news about Par Pacific’s buybacks and renewable projects, they help you quickly see whether your thesis still holds or needs adjusting without rebuilding your model from scratch.

For example, one Par Pacific Holdings Narrative might lean bullish, assuming the higher fair value of about $47.38 as tight regional supply, SAF projects and disciplined buybacks support margins. A more cautious Narrative might sit closer to $23.00, focusing on aging assets, leverage and energy transition risks. By comparing each Narrative’s Fair Value to today’s price you can decide which story, and which action, best fits your own view.

Do you think there's more to the story for Par Pacific Holdings? Head over to our Community to see what others are saying!

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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