In its announcement Tesoro pointed out the obvious problem:

The discount of WTI to Brent during the fourth quarter narrowed by $18/bbl, dropping from $26/bbl at the end of September to $8/bbl at the end of December. This market price movement impacts fourth quarter results in two ways. First, by reducing benchmark margins at our refineries that run WTI-priced barrels and, second, by reducing the margin on long-haul foreign crude oil barrels indexed to WTI.

Every independent refiner will get hit by this to some degree and we’ve taken a look at what the impact on each might be.

Valero is expected to post EPS of $0.84 in the fourth quarter. The country’s largest refiner owns 16 refineries with a daily throughput volume of 3 million barrels. It is also one of the world’s largest makers of ethanol. Half the refineries are located along the US Gulf Coast, and in the company’s latest investor presentation, WTI margins had fallen from around $26/barrel to around $15/barrel. The company’s Brent margins have stayed relatively flat, at around $10-$11/barrel. To counteract that somewhat, Valero expects to refine about 75,000 barrels/day from the Eagle Ford shale play in the first quarter of 2012. The company is also planning to expand its distillate production to capture the higher margins available from diesel fuel, especially in Europe. Valero hasn’t said anything yet about its fourth quarter earnings, but the company’s stock is down nearly -4% on Tesoro’s report. If Valero revises its earnings estimate — which is likely — another drop of at least that amount is likely.

Marathon completed its spin-off from parent Marathon Oil Corp. (NYSE: MRO) last June. The company owns six refineries and 51% of the company’s crude supply comes from either the US or Canada. The company’s WTI-Brent differential was nearly $23/barrel in the third quarter of this year compared with less than $3.50/barrel in 2010. No data is available for the fourth quarter, but it’s difficult to see how Marathon can avoid getting caught in the same bind as Tesoro and Valero.

Western Refining owns two refineries with a total throughput of 151,000 barrels/day. The company’s operating margin through the first three quarters of 2011 is around $20/barrel. All of Western’s crude is domestically sourced and priced as WTI. This is a nice advantage when Brent pricing is more than $25/barrel higher, but as the differential narrows, Western has to come up with some other way to make profits. This company could get stung badly on WTI pricing.

CVR Energy owns two refineries with a combined throughput of 185,000 barrels/day. Both are located in the Midwest and about 75% of the feedstock is domestically sourced WTI. CVR gets some portion of its feedstock from the Bakken area, which gives the company an additional break on crude pricing because Bakken crude trades at a small discount to WTI. Rising WTI prices will certainly hurt margins for CVR, but probably not as badly as the narrower differential will hurt other refiners.

One last word about Conoco, which is planning to spin-off its refining operations into a separate company. The spin-off was set to happen by mid-2012, but unless refining margins return to what they were last summer, Conoco might have a hard time convincing investors that they’re getting a good deal from the split.

Paul Ausick

The fortunes of any oil & gas producer depends on the price of the commodity, and crude prices in the US have been rising, while natural gas prices have been no better than flat for the year. And while crude prices could rise to an average of more than $105/barrel in 2012, natural gas prices are not expected to rise much next year as abundant supplies are likely to increase even more.

We’ve looked at several oil & gas companies, including the three US-based supermajors and a number of independents with market caps above $10 billion: Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX), ConocoPhillips (NYSE: COP), Range Resources Inc. (NYSE: RRC), Tesoro Corp. (NYSE: TSO), Pioneer Natural Resources Co. (NYSE: PXD); Anadarko Petroleum Co. (NYSE: APC), Chesapeake Energy Corp. (NYSE: CHK), Apache Corp. (NYSE: APA), and Occidental Petroleum Corp. (NYSE: OXY). We’ve looked at the past year’s stock price performance and compared that with median target prices as reported by Thomson Reuters in an effort to find the stocks we think will be top performers in 2012.

Exxon Mobil Corp. (NYSE: XOM) has a median price target of $92 and a current price of around $84.62, for a potential upside of 8.7%. That’s the lowest potential gain of any of the stocks in this survey, but combined with a share price gain of about 15% in the past 12 months and a dividend yield of 2.3%, Exxon’s upside is stronger than the simple calculation. The stock’s 52-week trading range is $67.03-$88.23, so the stock is trading within about 5% of its 52-week high. Crude oil price hikes provide substantial benefits to Exxon’s shares, and those price hikes could add $10-$20/barrel to the company’s revenues in the coming year.

Chevron Corp. (NYSE: CVX) has a median price target of $122.50 and a current price of around $106.76, for a potential upside of 14.7%. Of the three supermajors, Chevron’s potential gain is the largest, it’s share price gain of nearly 16.5% in the past year is the largest, and its dividend yield of 3% is second in among the three giants. The stock’s 52-week trading range is $86.68-$110.01. Chevron has been the strongest bet among the three US supermajors this past year, and there’s little reason to expect that to change in 2012. A new 52-week high is close, and current events in the Middle East could push shares to a new high before the new year.

ConocoPhillips (NYSE: COP) has a median price target of $82 and a current price around $72.24, for a potential upside of about 13.5%. Conoco trails the other two supermajors in share price gain for the past 12 months, posting a rise of just 6.35%. The company’s dividend yield is highest of the supers, at 3.7%. The stock’s 52-week trading range is $58.65-$81.80. Conoco just sold assets in the North Sea for $330 million as it continues to try to bring its debt back under control. Of the three supermajors, this is the least likely to achieve its potential upside.

Range Resources Inc. (NYSE: RRC) has a median price target of $77.50 and a current price around $61.55, for a potential upside of 26%. But Range’s share price has jumped more than 36% in the past year, but the company pays a paltry dividend yield of just 0.3%. The stock’s 52-week trading range is $44.20-$77.24. With a market cap of right around $10 billion, Range is often mentioned as a takeover target from one of the supers or another mining company that wants to diversify into energy. Range holds about 800,000 leased acres in the Marcellus shale play, which is located close to the massive northeast US market.

Tesoro Corp. (NYSE: TSO) has a median price target of $28 and a current price around $23, for a potential upside of about 22%. The refiner’s share price has gained more than 25% this year, but the company pays no dividend. The stock’s 52-week trading range is $17.43-$29.61. Unlike the other major US refiner, Valero Energy Corp. (NYSE: VLO), Tesoro has made no major acquisitions recently, apparently satisfied to play the hand it’s got. That’s probably smart, considering Valero shares got whacked in the past 12 months, down more than -9%. But as the Brent/WTI differential closes, no refining stock is a good bet for 2012, regardless of the potential upside calculation.

Pioneer Natural Resources Co. (NYSE: PXD) has a median price target of $115 and a current price around $75.75, for a potential upside of 31.4%. The company’s shares gained a meager 2.2% in the past 12 months and the dividend yield is just 0.1%. The stock’s 52-week trading range is $58.63-$106.07. Like Range Resources, Pioneer carries a market cap of right around $10 billion. Most of the company’s assets are in Texas, and most are oil. Either as a takeover target or as a liquids producer, Pioneer is a solid play.

Anadarko Petroleum Co. (NYSE: APC) has a median target price of $100 and a current price of $75.75, for a potential upside of 32%. The share price gained more than 9% in the past year and the company pays a dividend yield of just 0.5%. The stock’s 52-week trading range is $57.11-$85.50. Until fairly recently, Anadarko’s assets have been exclusively onshore in the US, but its acquisition of Kerr-McGee gave it a position in the Gulf of Mexico and the company has also acquired assets offshore of Africa. The potential upside here, combined with the company’s share price performance last year, make Anadarko a solid prospect for gains in 2012.

Chesapeake Energy Corp. (NYSE: CHK) has a median target price of $35.50 and a current price around $22.87, for a potential upside of 55%. Shares have lost more than -11% in the past 12 months and the company pays a dividend yield of 1.5%. The stock’s 52-week trading range is $22-$35.95. Chesapeake’s shares are near the 52-week low today following a report from Reuters on how the company used shell companies to secure leases to drilling rights in Michigan and potential lawsuits springing from the practice. On the other side, at least one analyst thinks Chesapeake offers a “compelling risk/reward” opportunity. That awe-inspiring upside potential is probably out of reach though. Chesapeake holds a lot of debt, and any hiccup in the financial markets could raise havoc with the company.

Apache Corp. (NYSE: APA) has a median price target of $134 and a current price of $88.63, for a potential upside of 51.2%. The company’s share price has fallen more than -25% in the past year and it pays a dividend yield of 0.7%. The stock’s 52-week trading range is $73.04-$134.13. Several directors and company officers have been buying shares in the past month or so. Just under half of the company’s liquids production comes from its US assets, so the rising prices for WTI are positives for Apache. The large potential upside is probably not going to be closed, but the company’s shares could easily improve by 25% in 2012.

Occidental Petroleum Corp. (NYSE: OXY) has a median price target of $117.50 and a current price around $93.69, for a potential upside of 25.4%. The company’s share price has fallen more than -4% in the past 12 months and it pays a dividend yield of 2%. The stock’s 52-week trading range is $66.36-$117.89. Oxy’s assets include liquids-rich fields in southern California, where pricing for crude and liquids is higher than anywhere else in the country. Other assets in Texas and elsewhere onshore in the US will drive revenue and profit at Oxy this year, and the stock’s potential upside is not an impossible goal.

Overall, among these oil & gas stocks, Chevron would be the pick among the supermajors, and either Range Resources or Pioneer among the independents, primarily on the possibility of a takeover. Refiners face a tough 2012 and Conoco’s decision to split off its refining into a separate company won’t help matters.

Paul Ausick

The unofficial closing bells put the DJIA up more than 52 points to 12,150.13 (0.43%), the NASDAQ fell more than 6 points (-0.23%) to 2,649.56, and the S&P 500 rose 0.11% or nearly 5 points to 1,258.47.

There were several analyst upgrades and downgrades today, including Altria Group Inc. (NYSE: MO) started as ‘buy’ at Deutsche Bank. Other ratings action include Verizon Communications Inc. (NYSE: VZ) reiterated as ‘buy’ with a $44 price target at Argus; Tesoro Corp. (NYSE: TSO) cut from ‘outperform’ to ‘neutral’ with a $34 price target at Credit Suisse; LinkedIn Corp. (NASDAQ: LNKD) raised to ‘overweight’ at JPMorgan; and General Electric Co. (NYSE: GE) raised to ‘outperform’ by Berstein.

Here are today’s post-earnings news reactions with prices during the last half-hour of trading: Chesapeake Granite Wash Trust (NYSE: CHKR) is up 0.7% at $19.94; Blyth, Inc. (NYSE: BTH) is down -0.05% at $66.33; Pep Boys-Manny, Joe, and Jack (NYSE: PBY) is down -5.5% at $11.21; Uranium Energy Corp. (AMEX: UEC) is up 0.66% at $3.06; AutoZone Inc. (NYSE: AZO) is down -0.12% at $338.56; Darden Restaurants Inc. (NYSE: DRI) is down -12% at $41.95; Toll Brothers Inc. (NYSE: TOL) is up nearly 3% at $21.37; and Liquidity Services Inc. (NASDAQ: LQDT) is up nearly 5.5% at $36.74, after posting a new 52-week high of $37.05 earlier in the day. Earnings releases coming after markets close today include Diamond Foods Inc. (NASDAQ: DMND); SAIC Inc. (NYSE: SAI); and Vera Bradley Inc. (NYSE: VRA).

Several other standouts from today are as follows…

Frontline Ltd. (NYSE: FRO) is up more than 19%, to $4.23. The oil tanker company has been suffering from low day rates and lack of cargoes, but today’s injection of $500 million from a Norwegian bank controlled by the company’s major shareholder, John Fredriksen, has pumped up interest in the stock.

Cell Therapeutics, Inc. (NASDAQ: CTIC) is up 14%, at $1.31. The drug-maker received notice from the FDA that its new drug application for a treatment for non-Hodgkins lymphoma is complete.

Comstock Resources Inc. (NYSE: CRK) is up nearly 15%, at $19.39. The oil & gas E&P company has acquired new acreage in the Delaware Basin of west Texas and reported that it had drilled five new producing wells in its Eagle Ford shale acreage.

Vonage Holdings Corp. (NYSE: VG) is down nearly -5%, at $2.52. The VoIP provider did not report any significant news, but the stock has been quite volatile over the past month.

Hecla Mining Co. (NYSE: HL) is up more than 9%, at $6.57. The miner benefited from today’s investors’ interest in gold mining stocks.

Stay tuned for Wednesday. We have noted Federal Reserve Governor Sarah Bloom Raskin moderating a panel on grass-roots participation at Baltimore branch of Richmond Fed. Here are other noteworthy events scheduled for Tuesday (all times Eastern):

• 7:00 a.m. – Mortgage Bankers Association purchase applications
• 10:30 a.m. – EIA weekly petroleum status report
• 3:00 p.m. – Report on outstanding consumer credit

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Paul Ausick

Altria Group Inc. (NYSE: MO) Started as Buy at Deutsche Bank.
Advance America, Cash Advance Centers Inc. (NYSE: AEA) named as value stock of the day at under 10-times earnings by Zacks.
Crown Holdings Inc. (NYSE: CCK) Started as Outperform with $43 target and was added to the Focus List at Credit Suisse.
General Electric Co. (NYSE: GE) Raised to Outperform by Bernstein (call was made late Monday afternoon).
Hibbett Sporting Goods (NASDAQ: HIBB) maintained Outperform with $47 target and named as Bull of the Day at Zacks.
HSBC Holdings PLC (NYSE: HBC) started as Underperform and named as Bear of the Day at Zacks.
ITC Holdings Corp. (NYSE: ITC) Cut to Neutral from Outperform at Credit Suisse.
LinkedIn Corporation (NYSE: LNKD) Raised to Overweight at JPMorgan.
MetroPCS Communications, Inc. (NYSE: PCS) Raised to Outperform from Market Perform on valuation by William Blair.
SAP AG (NYSE: SAP) Cut to Hold at S&P Equity Research.
Sonoco Products Co. (NYSE: SON) Started as Neutral with $34.00 price target at Credit Suisse.
Tesoro Corporation (NYSE: TSO) Cut to Neutral with $34 target from Outperform at Credit Suisse.
Verizon Communications Inc. (NYSE: VZ) Reiterated Buy with a $44 price target at Argus.

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JON C. OGG

Valero Energy Corp. (NYSE: VLO) shares closed down more than -9% on the day. Marathon Petroleum Corp. (NYSE: MPC) closed down nearly -12%, Tesoro Corp. (NYSE: TSO) closed down nearly -10%, and Western Refining Inc. (NYSE: WNR) was off -13.5%. CVR Energy, Inc. (NYSE: CVI) shares plunged more than -16%.

The major integrated oil companies with refining operations also experienced a down day, with Exxon Mobil Corp. (NYSE: XOM) off about -1%, Conoco down about -3%, Chevron Corp. (NYSE: CVX) down about -2%, and BP plc (NYSE: BP) down about -0.5%.

All this carnage over a 150,000 barrel/day pipeline that currently carries almost no oil from the Gulf Coast to the storage tanks at Cushing, Oklahoma, and will not be reversed until sometime later next year. The US consumes about 9 million barrels/day of crude just for transportation use, so less than 2% of that crude should not have such an outsized effect on refiner stocks.

The Seaway pipeline transaction, the other 50% of which is owned by Enterprise Products Partners L.P. (NYSE: EPD), was merely the trigger. Refiners’ profits have been strong in recent months as those with access to WTI and cheaper crudes have been able to price the refined output based on Brent crude input costs. The differential once reached nearly $28/barrel. The price difference closed to about $11/barrel yesterday and is around $8/barrel this morning.

Brent prices are falling, but not as fast as WTI prices are rising. The reversal of the Seaway pipeline means that landlocked WTI can now get to the Gulf Coast refineries where it will be priced the same as Brent. As the two crude prices converge, refiners will not be able to feast off that differential.

Another factor weighing against the refiners is the start-up of the Bakken Oil Express, a tank-car train running from North Dakota to Louisiana. The first train-load of crude left North Dakota on November 7th with 70,000 barrels, with current rail capacity of 100,000 barrels/day expected to increase to 250,000 barrels/day. Rail transport of crude and refined products has risen by more than 9% in the past year, to about 7,600 tank-cars/week.

The price of Brent is falling because production from Libya has ramped quickly, to reach about 700,000 barrels/day already, more than half its total production before the upheaval of last Spring. Full production of 1.3 million barrels/day could be reached before mid-2012, again keeping downward pressure on Brent pricing.

The final factor pushing WTI prices up is the tentative agreement between TransCanada Corp. (NYSE: TRP) and the state of Nebraska on a new route for the Keystone XL pipeline from Canada to the Gulf Coast. This pipeline could carry up to 1.1 million barrels/day when (if) it is built. Because Canada’s synthetic crude is priced even lower than WTI, getting this pipeline into service is critical to oil sands producers who want to see the differential between synthetic crude and WTI/Brent close if not disappear altogether.

TransCanada has said that it is considering moving ahead with the section of the Keystone XL that runs from Cushing to the Gulf Coast and Enterprise has said that it will scrap plans for a new pipeline from Cushing to the Gulf but now plans to expand the Seaway pipeline to as much as 400,000 barrels/day by 2013. The two pipelines combined could carry nearly 1 million barrels/day from Cushing to the Gulf.

That million barrels represents crude that would not need to be imported by ship to the Gulf, but rather than lowering crude prices, it would raise them. That raises refiners’ input costs and raises the price of gasoline at the pump for consumers.

BP and Royal Dutch Shell plc (NYSE: RDS-A) probably stand to gain the most of any of the integrated oil companies from the new outlets to the Gulf. Shell is a big producer from the oil sands and BP is upgrading its refinery in Indiana to process the heavy Canadian synthetic crude, as well as owning production properties in the US midwest.

Refiners’ stocks are likely to take more losses today, though not as bad as the beating they got yesterday. Big oil companies could lose a bit more today, but the rising price for crude more than offsets any hits to their refining operations.

Paul Ausick

Western reported that the price difference for the quarter was $23.45/barrel, and because the company buys crude at the WTI price and sells its refined products based on the Brent price, margins shot up. This may seem extortionate, but every major refiner does it for a very simple reason: why charge less for your product if consumers have demonstrated that they are willing to pay more?

Refiner Tesoro Corp. (NYSE: TSO) reported third-quarter EPS last night of $2.39, some $0.41 above the consensus estimate. The largest US refiner, Valero Energy Corp. (NYSE: VLO), posted EPS for the third-quarter of $2.11, well above estimates of $1.80. Marathon Petroleum Corp. (NYSE: MPC) reported EPS for the quarter of $3.16, way above estimates of $2.44. Refining margins also boosted earnings for the major integrated oil giants BP plc (NYSE: BP), Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX), and ConocoPhillips Corp. (NYSE: COP).

Murphy Oil Co. (NYSE: MUR) reported EPS of $1.73, excluding discontinued operations, compared with a consensus estimate of $1.18. The company attributed the increase to higher prices for its crude production and higher refining margins. Exploration & production revenue rose about 40%, while refining & marketing revenue rose more than 52%.

The average price of a gallon of gasoline in the US on October 31st was about $3.45, almost $0.65/gallon more than at the same time last year. On the same day, the spot price of a barrel of WTI crude was $93.19 and the spot price of a barrel of Brent crude was $108.43. On the same date one year ago, the WTI crude spot price was $81.45/barrel and the Brent crude spot price was $82.47. A gallon of regular gasoline cost about $2.82 at the end of October 2010.

The current differential between WTI and Brent is $15.24. That amount goes straight to a refiner’s top line, and puts a nice positive gain on the bottom line. Even cheaper varieties of crude, such as the heavier and more sulfurous Saudi crudes, are available and the differentials are even wider though most imported crudes are indexed to the Brent spot price. Still, every barrel that is refined in the US yields products that are priced to consumers as if the crude input were a barrel of Brent.

The Brent spot price is expected to drop as production resumes from Libya. Libya’s light, sweet crude is comparable to Brent, and the International Energy Agency expects Libyan production to grow to 600,000 barrels/day by the end of this year. OPEC has estimated that the country’s former production of about 1.3 million barrels/day could be back on-line by late next year. That will continue to moderate the Brent spot price and the differential to WTI.

The price differential between WTI and Brent is closing, if slowly, and gasoline prices should continue to fall, even if more slowly. That’s good news for US drivers and could be the best holiday gift for the weak US economy.

Paul Ausick

AutoNation Inc. (NYSE: AN) 38.1% year-to-date; caution: at $38.94 the consensus price target is $31.28.

Ross Stores Inc. (NASDAQ: ROST) 38.7% year-to-date; caution: at $87.73 the consensus price target is $85.00.

Limited Brands, Inc. (NYSE: LTD) 39.0% year-to-date; at $42.71 the consensus price target is $44.71.

Goodrich Corporation (NYSE: GR) 39.2% year-to-date; This is being acquired, so no color.

Tesoro Corporation (NYSE:TSO) 39.9% year-to-date; at $25.94 the consensus price target is $20.31.

EQT Corporation (NYSE:EQT) 41.6% year-to-date; at $63.50 the consensus price target is $72.28.

Electronic Arts Inc. (NASDAQ: ERTS) 42.6% year-to-date; at $23.35 the consensus price target is $25.63. This was previously listed as our top pick for the best video game stock for 2011.

Whole Foods Market, Inc. (NASDAQ: WFM) 42.6% year-to-date; at $72.12 the consensus price target is $74.47.

Ralph Lauren Corporation (NYSE: RL) 43.2% year-to-date; caution: at $158.79 the consensus price target is $150.00.

Teradata Corporation (NYSE: TDC) 44.9% year-to-date; at $59.66 the consensus price target is $60.56.

Range Resources Corporation (NYSE: RRC) 53.0% year-to-date; at $68.84 the consensus price target is $76.50.

Mastercard Incorporated (NYSE: MA) 54.9% year-to-date; at $347.24 the consensus price target is $374.82.  It seems odd to see one financial stock here.

Humana Inc. (NYSE: HUM) 55.1% year-to-date; at $84.89 the consensus price target is $88.71. Health insurance has not been as bad of a business as the administration was looking for.

Chipotle Mexican Grill, Inc. (NYSE: CMG) 58.1% year-to-date; caution: at $336.12 the consensus price target is $328.45.  The growth continues, but it is at or close to being fully valued.

V.F. Corporation (NYSE: VFC) 60.4% year-to-date; at $138.22 the consensus price target is $144.33.

Intuitive Surgical, Inc. (NASDAQ: ISRG) 68.3% year-to-date; caution: at $433.86 the consensus price target is $419.27.  DaVinci sales remain robust as more surgeons are looking for robotic surgery capabilities.

Biogen Idec Inc. (NASDAQ: BIIB) 73.5% year-to-date; caution: at $116.36 the consensus priced target is $115.22.  Here is how this compared to the rest of its peers before earnings season.

El Paso Corp. (NYSE: EP) 81.8% year-to-date; being acquired so no color.

Cabot Oil & Gas Corporation (NYSE: COG) 105.3% year-to-date; ; at $77.72 the consensus price target is $91.32.

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JON C. OGG

This last week’s top analyst calls of the week were in the following: Activision Blizzard, Inc. (NASDAQ: ATVI); Apple Inc. (NASDAQ: AAPL); Applied Materials Inc. (NASDAQ: AMAT); Cisco Systems, Inc. (NASDAQ: CSCO); Corning Inc. (NYSE: GLW); Dunkin’ Brands Group (NASDAQ: DNKN); Lennar Corporation (NYSE: LEN); Lululemon Athletica Inc. (NASDAQ: LULU); Motorola Solutions, Inc. (NYSE: MSI); NASDAQ OMX Group (NASDAQ: NDAQ); SodaStream International Ltd. (NASDAQ: SODA); The Talbots Inc. (NYSE: TLB); Teavana Holdings, Inc. (NYSE: TEA); Tesoro Corporation (NYSE: TSO); and TiVo Inc. (NASDAQ: TIVO).

Just a week ago we evaluated the myth of The Curse of September, and so far that myth is not bucking the trend seen in the two years before this one.  We saw Credit Suisse trim GDP and the S&P 500 for 2011 and 2012, via the SPDR S&P 500 ETF (NYSE: SPY).  We even saw hedge fund bearish sentiment reach an extreme high, something which usually is a calling card for a reversal by contrarian investors.  There were quite a few analyst calls with big impacts this last week.

Activision Blizzard, Inc. (NASDAQ: ATVI) was initiated with coverage this last Tuesday with a BUY rating and a $16.00 target at Citigroup.  What makes this call so interesting is not just that the pullback this week brought it back down to $11.42 for 40$ upside to the new target.  The consensus price target is $14.35.  What is interesting here is that the $16 target is close to the cycle highs back in 2008 before the meltdown started.  With a great game line-up and with a steady revenue stream from monthly subscriptions, it makes you wonder if there is really that much upside.  That is a “Street High” target.

Charles River Laboratories International, Inc. (NYSE: CRL) Started as Hold at Citigroup.
Cisco Systems, Inc. (NASDAQ: CSCO) Raised to Sector Perform at RBC.
Corning Inc. (NYSE: GLW) Maintained Buy but cut target to $25 at BofA/ML.
Expedia Inc. (NASDAQ: EXPE) Started as Outperform at Wedbush.
Pharmaceutical Product Development Inc. (NASDAQ: PPDI) Started as Hold at Citigroup.
Polo Ralph Lauren (NYSE: RL) named Bull of the Day at Zacks.
Priceline.com Incorporated (NASDAQ: PCLN) Started as Outperform at Wedbush.
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) Cut to Underperform at BofA/ML.
Research In Motion Limited (NASDAQ: RIMM) Cut to Underperform at Jefferies.
RPM International (NYSE: RPM) Raised to Neutral at Credit Suisse.
Sotheby’s Inc. (NYSE: BID) called the value stock of the day at Zacks.
Tesoro Corporation (NYSE: TSO) Cut to Sell at Goldman Sachs.
TiVo Inc. (NASDAQ: TIVO) Started as Buy at Brean Murray.
United Rentals, Inc. (NYSE: URI) Started as Outperform at Credit Suisse.

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JON C. OGG

Marathon Petroleum was spun out of Marathon Oil Corp. (NYSE: MRO) in late July. Since then, the stock has been quite volatile, but is now back to about where it was at the time of the spin-off. Shares recently traded at $37.41 and its market cap is $12.94 billion. The stock’s 52-week trading range is $29.32 to $47.17.  The current value is trading at a price-to-book ratio of about 1.44 to 1. Its forward price earnings multiple is 4.86. The company currently pays a dividend yield of 2.2% to investors.  Thomson Reuters has a consensus price target of $51.92, implying roughly 39% upside to the most recent price.

Valero has gotten a boost from its entry into the ethanol market and could be a buyer for the two refineries that Sunoco plans to shed by next July. Valero’s shares recently traded at $23.55 and its market cap is $12.75 billion. The stock’s 52-week trading range is $16.43-$30.98.  The current value is trading at a price-to-book ratio of about 0.80 to 1. Its forward price earnings multiple is 5.39. The company currently pays a dividend yield of 0.90% to investors. Thomson Reuters has a consensus price target of $30.06, implying roughly 28% upside to the most recent price.

Murphy Oil, unlike the other refiners, still owns some exploration and production assets that help keep its value up. Murphy’s stock recently traded at $51.98 and its market cap is $10.18 billion. The stock’s 52-week trading range is $47.24-$77.41.  The current value is trading at a price-to-book ratio of about 1.15 to 1. Its forward price earnings multiple is 7.39. The company currently pays a dividend yield of 2.09% to investors. Thomson Reuters has a consensus price target of $75.00, implying roughly 44% upside to the most recent price.

HollyFrontier was formed from a merger of Holly Corp. and Frontier Oil in June of this year. Since then the stock has moved generally upward. HollyFrontier shares recently traded at $37.74 and its market cap is $7.79 billion. The stock’s 52-week trading range is $13.34-$38.90. The current value is trading at a price-to-book ratio of 4.13. Its forward price earnings multiple is 6.12. The company currently pays a dividend of 0.94% to investors. Thomson Reuters has a consensus price target of $41.00, implying roughly 10% to the most recent price.

Sunoco announced yesterday that it would be selling or closing its remaining refining assets. Once that happens, Sunoco will own gas stations and majority positions in two other recent spin-offs in logistics and petroleum coke production. Sunoco’s shares recently traded at $38.79 and its market cap is $4.75 billion. The stock’s 52-week trading range is $27.76-$46.57. The current value is trading at a price-to-book ratio of 1.68. Its forward price earnings multiple is 19.70. The company currently pays a dividend of 1.53% to investors. Thomson Reuters has a consensus price target of $44.20, implying roughly 14% to the most recent price.

Tesoro has announced that it plans to add nearly 300 retail outlets to its existing 1,200. The company expects a 12% boost to its business with these additions. Tesoro shares recently traded at $25.02 and its market cap is $3.46 billion. The stock’s 52-week trading range is $12.03-$28.74.  The current value is trading at a price-to-book ratio of about 0.97 to 1. Its forward price earnings multiple is 6.35. The company currently pays no dividend to investors. Thomson Reuters has a consensus price target of $27.79, implying roughly 11% upside to the most recent price.

Western Refining is the smallest of the seven companies we’ve looked at here. Most of its sales are in low population states in the US southwest. Western’s shares recently traded at $17.95 and its market cap is $1.62 billion. The stock’s 52-week trading range is $4.70-$21.75.  The current value is trading at a price-to-book ratio of about 2.00 to 1. Its forward price earnings multiple is 5.85. The company currently pays no dividend to investors. Thomson Reuters has a consensus price target of $20.63, implying roughly 15% upside to the most recent price.

The substantial upside for Murphy reflects the company’s E&P asset holdings. Owning at least some of the refining feedstock helps Murphy smooth out the higher prices for crude oil and its access to domestic crude rather than imported, more expensive crude also works in its favor. Marathon Petroleum and Valero also have substantial upside, but in their cases they are vulnerable to a closing of the differential between WTI and Brent crudes. Murphy is an overall better choice.

Paul Ausick