Zacks Investment Research downgraded shares of Western Refining, Inc. (WNR) from OUTPERFORM to NEUTRAL on December 03, 2012, with a target price of $31.00.
We are downgrading Western Refining shares to Neutral from Outperform following the independent oil refiner and marketer's weaker-than-expected operating results and its recent gains that has catapulted the stock to a five-year high. While we continue to like the company for its access to the discounted WTI crude, considerable success in reducing debt and the initiatives to improve reliability/reduce operating costs, we think that the current valuation is fair and adequately reflects the downstream operator's future growth prospects. Western Refining is also faced with volatile industry fundamentals and limited geographic diversification, which may further limit its ability to generate positive earnings surprises.
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