HF Sinclair Earnings: Big Buyback Follows Strong Results; Shares Undervalued

HF Sinclair's first-quarter adjusted earnings decreased to $142.3 million from $394.1 million a year ago but exceeded market expectations on lower refining earnings. The firm repurchased $169.6 million in shares during the quarter, in line with the fourth quarter. However, it announced a new $1 billion repurchase authorization, (about 9% of current market cap). Management was not specific on timing but indicated its commitment to return cash to shareholders by leaning into repurchases in the currently strong environment. Combined with a larger repurchase amount in April disclosed by management, we wouldn’t be surprised to see the bulk be used this year.