HollyFrontier Corp (NYSE:HFC) has recently announced that it would be selling its El Dorado refinery assets to HollyEnergy Partners LP. The assets include a newly constructed naphtha fractionation and hydrogen generation units. The acquisition has been priced at a total of $62 million, to be paid in cash by HollyEnergy. Furthermore, the analysts at Zack’s have awarded HFC a buy rating of 2. Other analysts are following in close pursuit to this change, as the company is expected to improve its earnings in the coming months.
The recent deal, between HollyFrontier and HollyEnergy, is expected to close in the 4Q2015. Following the agreement, the two companies will enter in a 15-year long tolling agreement, which would require HollyFrontier to meet minimum quarterly commitments. However, HollyEnergy believes that the benefits of the deal would be immediately visible on the stock, after closure.
Being a private refiner and marketer of oil and petroleum products, HFC has been largely unaffected by falling oil prices. However, as the entire oil & gas industry starts to move up, all oil producers would be expected to rise with it. Furthermore, the company has been surpassing quarterly estimates from analysis, for the past 6 months. Additionally, the recent revisions by analysts have shown that the EPS and revenues are expected to move up, which ensures better security to the stock.
Currently, the oil & gas industry is ranked at number 42, out of around 250 industries. This coupled with the revision of HFC EPS estimates, from $1.46 to $1.59 for 3Q2015, confirms that the company has a lot in store for its investors. Furthermore, the company is also expected to report $5.06 EPS for the current year. However, HFC has further rendered itself a safe bet, by holding a 39% stake in HollyEnergy, which specializes in the transport of petroleum products in the industry.
HollyFrontier Corp (NYSE:HFC) reported a trade volume of 0.00 during the September 17 session, to close at a share price of $46.59 after reporting a spike of 2.76%.