Assessing PBF Energy’s Valuation After Q3 Profit Rebound and New Production Guidance

PBF Energy (PBF) just released its third quarter results, swinging to a profit compared to last year, and offered production guidance for the upcoming quarter. The earnings rebound and outlook announcement come at a time when investors are closely monitoring the sector.

See our latest analysis for PBF Energy.

PBF Energy’s upbeat earnings and production guidance appear to have energized the stock, with a one-month share price return of over 33%. This momentum has been steadily building all quarter. While the latest dividend affirmation adds to positive sentiment, it is worth noting that the total shareholder return over one year sits at 25%, and the five-year figure is a staggering 521%. That said, performance over the last three years has been more challenging, underlining just how quickly sentiment can shift in this space.

If this kind of turnaround has you rethinking your watchlist, it’s a great time to discover fast growing stocks with high insider ownership.

With PBF Energy posting strong quarterly gains and forward-looking guidance, the key question for investors is whether the current stock price undervalues the company or if the market has already priced in future growth potential.

Most Popular Narrative: 31.8% Overvalued

According to the most widely followed narrative, PBF Energy’s fair value is pegged at $28 per share, well below the most recent close of $36.91. This valuation creates a sharp contrast for investors weighing today’s rally against longer-term fundamentals.

Net global demand for refined products is expected to exceed net refining capacity additions in the coming years, driven by ongoing population growth and underinvestment in new refining capacity outside North America. This tightening supply backdrop should support strong utilization, pricing power, and higher revenues for efficient U.S. refiners like PBF.

Read the complete narrative.

What’s driving this bold fair value? The narrative relies on market-defining earnings growth, margin transformation, and a controversial profit valuation by 2028. See the specific assumptions and analyst logic that support this outlook. Are you willing to bet on these numbers?

Result: Fair Value of $28 (OVERVALUED)

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

However, persistent operational hurdles and ongoing regulatory uncertainties could quickly challenge these optimistic projections. This could shift market sentiment for PBF Energy.

Find out about the key risks to this PBF Energy narrative.

Another View: Our DCF Model Challenges the Multiples Approach

While the market’s favorite valuation method suggests PBF Energy is overvalued based on its price compared to fundamentals, our DCF model offers a different view. The SWS DCF model indicates PBF is actually trading 10.5% below its fair value. This suggests a hidden opportunity that the multiples approach might miss. Could this deeper cash flow analysis hold the real answer for investors?

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

Build Your Own PBF Energy Narrative

If you want to dig deeper or shape your own view, you’re free to build your own analysis in just a few minutes, your way with Do it your way.

A great starting point for your PBF Energy research is our analysis highlighting 3 key rewards and 2 important warning signs 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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