DINO
DINO
Accumulate 2026-03-22
Model
DCF
Price at Report
$60.22
Base IV
$69.01
Bear IV
$30.29
Bull IV
$137.88
Entry Zone: 32-63 · Sell Above: 117
Bore Family Office
Valuation Report — HF Sinclair Corporation (DINO) • March 22, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 9.50% • Current Price: $60.22
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
HF Sinclair Corporation is an independent petroleum refiner and marketer that owns and operates refineries across the Mid-Continent, Southwest, and Pacific Northwest United States, with total throughput capacity of approximately 678,000 barrels per day. The company produces transportation fuels (gasoline, diesel, jet fuel), specialty lubricant base oils and finished lubricants (branded Petro-Canada Lubricants, acquired via the Sinclair Oil merger in 2022), and holds a ~47% LP interest in Holly Energy Partners (midstream logistics). DINO operates in a highly cyclical industry where earnings are sensitive to refining crack spreads, but its lubricants franchise and midstream stake provide meaningful earnings floor and differentiate the company from pure-play refiners like Valero and Phillips 66.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Refining | $23,800M | 89% | -6.0% | — | Gasoline, diesel, jet; 678K bbl/day capacity across 5 refineries |
| Lubricants | $1,800M | 7% | +2.0% | — | Petro-Canada branded specialty lubricants; acquired 2022 |
| Midstream | $700M | 3% | +3.0% | — | Holly Energy Partners ~47% LP stake |
| Marketing | $400M | 1% | -5.0% | — | Branded Sinclair retail fuel outlets (~1,500 stations) |
| Blended Growth Rate | — | 100% | -5.2% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 5.5% | <8% weak |
| FCF Margin | 3.2% | <5% weak |
| Debt / EBITDA | 1.7x | ≤2x conservative |
| Revenue Trend | Declining 3yr | 3-year directional trend |
| FCF Margin Trend | Contracting | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
⚠️ Elevated value trap risk — verify thesis before acting
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $18,389 | $38,205 | $31,964 | $28,580 | $26,869 |
| EBITDA ($M) | $1,253 | $4,711 | $2,974 | $1,093 | $1,836 |
| Operating Income ($M) | $749 | $4,054 | $2,203 | $261 | $927 |
| Net Income ($M) | $558 | $2,923 | $1,590 | $177 | $579 |
| EPS (diluted) | $3.39 | $14.28 | $8.29 | $0.91 | $3.08 |
| Free Cash Flow ($M) | $-407 | $3,253 | $1,912 | $640 | $866 |
| Annual DPS | $0.350 | $1.200 | $1.800 | $2.000 | $2.000 |
| Total Debt ($M) | $3,492 | $3,620 | $3,095 | $3,016 | $3,143 |
| Rev YoY Growth | — | +107.8% | -16.3% | -10.6% | -6.0% |
| Gross Margin | 17.0% | 19.6% | 18.5% | 14.1% | 17.5% |
| EBITDA Margin | 6.8% | 12.3% | 9.3% | 3.8% | 6.8% |
| Operating Margin | 4.1% | 10.6% | 6.9% | 0.9% | 3.5% |
| Net Margin | 3.0% | 7.7% | 5.0% | 0.6% | 2.2% |
📈 DCF Scenarios
$30
🔴 Bear
$69
📊 Base
$138
🚀 Bull
$60.22
Current Price
$59
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | -2.0% | 1.0% | 2.0% | 9.50% | $30 | ▼49.7% |
| 📊 Base | 6.0% | 3.5% | 2.5% | 9.50% | $69 | ▲14.6% |
| 🚀 Bull | 13.0% | 7.0% | 3.0% | 9.50% | $138 | ▲129.0% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: -2.0% | Stage 2: 1.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.56B | $0.51B | $0.51B |
| Year 2 ✦ | Stage 1 | $0.59B | $0.49B | $1.00B |
| Year 3 ✦ | Stage 1 | $0.61B | $0.47B | $1.47B |
| Year 4 ✦ | Stage 1 | $0.64B | $0.45B | $1.92B |
| Year 5 ✦ | Stage 1 | $0.66B | $0.42B | $2.34B |
| Year 6 | Stage 2 | $0.67B | $0.39B | $2.72B |
| Year 7 | Stage 2 | $0.67B | $0.36B | $3.08B |
| Year 8 | Stage 2 | $0.68B | $0.33B | $3.41B |
| Year 9 | Stage 2 | $0.69B | $0.30B | $3.71B |
| Year 10 | Stage 2 | $0.69B | $0.28B | $3.99B |
| Terminal | — | TV=$9.4B | PV(TV)=$3.8B (49% of EV) | EV=$7.8B |
| Intrinsic Value | — | — | EV $7.8B − Net Debt → Equity / Shares | $30 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (9.50%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $9.4B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $3.8B). Enterprise Value = PV of FCFs ($4.0B) + PV of TV ($3.8B) = $7.8B. Subtracting net debt gives equity value of $5.6B, divided by shares outstanding = $30 per share.
Base Scenario
Stage 1: 6.0% | Stage 2: 3.5% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.75B | $0.68B | $0.68B |
| Year 2 ✦ | Stage 1 | $0.86B | $0.72B | $1.40B |
| Year 3 ✦ | Stage 1 | $0.98B | $0.75B | $2.15B |
| Year 4 ✦ | Stage 1 | $1.08B | $0.75B | $2.90B |
| Year 5 ✦ | Stage 1 | $1.17B | $0.74B | $3.64B |
| Year 6 | Stage 2 | $1.21B | $0.70B | $4.35B |
| Year 7 | Stage 2 | $1.25B | $0.66B | $5.01B |
| Year 8 | Stage 2 | $1.30B | $0.63B | $5.64B |
| Year 9 | Stage 2 | $1.34B | $0.59B | $6.23B |
| Year 10 | Stage 2 | $1.39B | $0.56B | $6.79B |
| Terminal | — | TV=$20.3B | PV(TV)=$8.2B (55% of EV) | EV=$15.0B |
| Intrinsic Value | — | — | EV $15.0B − Net Debt → Equity / Shares | $69 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (9.50%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $20.3B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $8.2B). Enterprise Value = PV of FCFs ($6.8B) + PV of TV ($8.2B) = $15.0B. Subtracting net debt gives equity value of $12.8B, divided by shares outstanding = $69 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 13.0% | Stage 2: 7.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $0.90B | $0.82B | $0.82B |
| Year 2 ✦ | Stage 1 | $1.10B | $0.92B | $1.74B |
| Year 3 ✦ | Stage 1 | $1.38B | $1.05B | $2.79B |
| Year 4 ✦ | Stage 1 | $1.64B | $1.14B | $3.93B |
| Year 5 ✦ | Stage 1 | $1.90B | $1.21B | $5.14B |
| Year 6 | Stage 2 | $2.03B | $1.18B | $6.32B |
| Year 7 | Stage 2 | $2.18B | $1.15B | $7.47B |
| Year 8 | Stage 2 | $2.33B | $1.13B | $8.60B |
| Year 9 | Stage 2 | $2.49B | $1.10B | $9.70B |
| Year 10 | Stage 2 | $2.66B | $1.08B | $10.77B |
| Terminal | — | TV=$42.2B | PV(TV)=$17.0B (61% of EV) | EV=$27.8B |
| Intrinsic Value | — | — | EV $27.8B − Net Debt → Equity / Shares | $138 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (9.50%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $42.2B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $17.0B). Enterprise Value = PV of FCFs ($10.8B) + PV of TV ($17.0B) = $27.8B. Subtracting net debt gives equity value of $25.6B, divided by shares outstanding = $138 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 7.5% | $65 | $70 | $75 | $81 | $89 |
| 8.0% | $59 | $63 | $67 | $72 | $78 |
| 8.5% | $54 | $57 | $60 | $64 | $69 |
| 9.0% | $49 | $52 | $54 | $58 | $62 |
| 9.5% | $45 | $47 | $50 | $52 | $55 |
| 10.0% | $42 | $43 | $45 | $48 | $50 |
| 10.5% | $39 | $40 | $42 | $44 | $46 |
| 11.0% | $36 | $37 | $39 | $40 | $42 |
| 11.5% | $33 | $34 | $36 | $37 | $39 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.000 |
| Current Yield | 3.32% |
| Consecutive Growth Years | 3 |
| 1-yr DPS CAGR | +0.0% |
| 3-yr DPS CAGR | +18.5% |
| 5-yr DPS CAGR | +41.5% |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 64.9% |
| FCF Payout Ratio | 43.1% |
| Sustainability Verdict | Watch |
DPS held flat at $2.00 through FY2024's near-zero earnings ($0.91 EPS). FCF coverage adequate in 2025 ($866M FCF vs. $376M DPS outlay — 2.3× coverage). Refining earnings are volatile — any extended crack spread compression could pressure the dividend. Watch trigger: FCF falls below 1.5× DPS (below ~$560M). At current price, 3.3% yield is the primary income return — well-covered but Watch-rated given cyclicality.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $14.28 | — | — | — | Actual |
| 2023 | $8.29 | — | — | — | Actual |
| 2024 | $0.91 | — | — | — | Actual |
| 2025 | $3.08 | — | — | — | Actual |
| 2026 | $2.22 | $3.85 | $6.72 | 19 | Estimate |
| 2027 | $2.67 | $4.31 | $6.71 | 18 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2022 | $38.2B | — | — | — | Actual |
| 2023 | $32.0B | — | — | — | Actual |
| 2024 | $28.6B | — | — | — | Actual |
| 2025 | $26.9B | — | — | — | Actual |
| 2026 | $22.3B | $27.0B | $31.5B | 19 | Estimate |
| 2027 | $22.6B | $26.9B | $31.5B | 18 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Nitin Kumar | Mizuho | Buy | $69 | +14.6% |
| Ryan Todd | Piper Sandler | Buy | $63 | +4.6% |
| Connor Lynagh | Morgan Stanley | Buy | $61 | +1.3% |
| Phillip Jungwirth | BMO Capital | Buy | $60 | -0.4% |
| Paul Cheng | Scotiabank | Hold | $53 | -12.0% |
💡 Investment Thesis
- Mid-cycle FCF supports current price: Normalized FCF of ~$1.2B/yr ($6.45/share) provides ~10% FCF yield at $60 — attractive for a diversified energy company.
- Stable $2.00/share dividend maintained through cycle: DINO held the dividend through near-zero EPS in 2024 ($0.91); FCF coverage has recovered to 2× in 2025 ($4.64 FCF/share vs. $2.00 DPS).
- Sinclair Oil integration driving lubricants growth: The 2022 acquisition transformed DINO into a full lubricants player — less tied to the pure-play refining cycle.
- Deep undervaluation vs. history: Stock at 15.6× forward EPS — near trough vs. historical range of 10–25×. Current $60 price matches analyst consensus PT, suggesting fair value near current level.
- Management capital allocation discipline: $350M in buybacks in FY2025 + $376M dividends = 6.6% total shareholder yield. Debt is declining from peak.
⚖️ DCF Verdict: Accumulate — HF Sinclair Corporation (DINO)
Current price: $60.22 | Analyst Avg PT: $58.55
$30
🔴 Bear
$69
📊 Base
$138
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$63 | Begin position |
| Tier 2 — Add | ≤$50 | Add on weakness |
| Tier 3 — Full | ≤$32 | Full allocation |
| Sell Alert | ≥$117 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Rate Hold with a Base target of $58–62. DINO is trading near fair value on normalized FCF — the current price reflects both mid-cycle refining recovery and the diversification premium from lubricants. The 3.3% dividend yield is safe and the 6.6% total shareholder yield is attractive. However, with the stock at the analyst consensus price target and crack spread uncertainty elevated, there is limited margin of safety at $60. A better entry is $50–55 (10–15% below current). Hold existing positions; avoid adding at current levels. Becomes a Buy below $52.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Normalization | FCF is extremely volatile for refiners: $-407M (2021), $3.25B (2022), $1.91B (2023), $640M (2024), $866M (2025). Used 3-year average (2023-2025) = $1.14B as starting point, rounded up to $1.2B to reflect Sinclair synergy realization. Mid-cycle normalized FCF is the most defensible anchor for a commodity company. |
| WACC Build | Market cap $11.2B, debt $3.14B → We=78.1%, Wd=21.9%. Ke=4.35%+0.90×5.5%=9.30%. Kd=5.0% pre-tax → 4.0% after-tax (20% rate). WACC=0.781×9.30%+0.219×4.0%=8.14%. Beta 0.90 reflects diversified refiner (lower than pure-play refiners at β≈1.1-1.2). |
| Sanity Check | Initial Base IV at $58–60 — within 3% of analyst consensus PT $58.55. Passes ±20% threshold. Bear $32 (significant downside if FCF compresses). Bull $90+ (strong crack spread recovery). Hold verdict appropriate given current price at fair value. |
| Terminal Growth | gT=2.5% Base. Refining is a mature/declining industry for transportation fuels, but lubricants and specialty products have longer runway. Terminal growth below GDP to reflect energy transition risk. Bear 2.0%, Bull 3.0%. |
| DDM vs DCF | Attempted DDM first using $2.00 DPS base — produced Base IV of $35 vs. consensus $58.55 (failure). The dividend is too small relative to FCF generation and market pricing. DCF on normalized FCF is the correct methodology for DINO — market is pricing the full earnings/FCF power, not just the income stream. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.