Citi Research raised its rating for Tesoro to buy from neutral, saying the company is now a compelling value after the sharp decline this year.
Tesoro shares are down 27 percent this year as of Monday's close.
"Valuations have come in significantly across the group. ... TSO obtains a significant amount of its cash flows from its midstream and marketing assets. We believe the value of these assets has held up better than pure refining assets," Citi's Faisel Khan wrote in a note to clients Tuesday.
"We upgrade TSO based on our SOTP analysis."
The marketing business is the selling of energy product after it is refined.