Valero Energy (VLO) AI Stock Analysis

• Market Cap: $60.21B
• Dividend Yield: 2.74%
• Average Volume (3M): 3.32M
• Price to Earnings (P/E): 25.4
• Beta (1Y): 1.13
• Revenue Growth: -8.48%
• EPS Growth: -56.92%
• Country: US
• Employees: 9,898
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 3.82
• Shares Outstanding: 305,009,550
• 10 Day Avg. Volume: 3,557,046
• 30 Day Avg. Volume: 3,322,261
• PEG Ratio: -0.22
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 0.30
• P/FCF Ratio: 6.83
• Enterprise Value/Market Cap: 1.49
• Enterprise Value/Revenue: 0.73
• Enterprise Value/Gross Profit: 21.87
• Enterprise Value/Ebitda: 16.65
• 1Y Price Target: $196.00
• Price Target Upside: -0.71% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: $202.00 ▲(2.33% Upside)

The score is driven primarily by solid underlying financial quality (strong cash generation and stable leverage) and supportive technical trend signals. Earnings-call tone and guidance reinforce operational execution and shareholder returns, while the main constraint is valuation (high P/E) alongside ongoing profitability pressures in parts of the business (renewable diesel and near-term Benicia-related costs).

Positive Factors

Free cash flow strength

Consistent free cash flow growth and strong cash conversion create durable financial flexibility. This supports sustaining capex, the company’s minimum cash buffer and sizable shareholder returns, allowing Valero to fund growth projects and buybacks while maintaining liquidity.

Operational reliability and throughput

Record mechanical availability and very high utilization indicate improving operational execution. Higher throughput and reliability increase fixed-cost absorption, raise sustainable refined-product volumes, and strengthen long-term margin resilience versus peers with lower utilization.

Disciplined capital allocation and returns

A formal payout framework, explicit net-debt targets and a minimum cash balance institutionalize capital discipline. This reduces reinvestment and leverage risk, supports predictable shareholder returns, and preserves balance sheet strength across commodity cycles.

Negative Factors

Renewable diesel profitability weakness

A near‑term ~46% drop in renewable diesel operating income highlights structural margin vulnerability in the low‑carbon segment. Policy uncertainty, tariffs and feedstock volatility can keep renewables margins depressed, limiting diversification benefits and long‑term earnings growth.

Benicia cessation costs and D&A hit

The planned Benicia cessation creates sustained depreciation and amortization expenses and near-term EPS pressure. Phased idling and the need for supplemental regional supply elevate West Coast logistics and margin disruption risks over the coming quarters.

Negative revenue growth and margin pressure

A negative TTM revenue trend and compressed margins point to structural profitability pressure. If persistent, this reduces returns on capital and undermines the balance sheet’s buffer, forcing either higher leverage or reduced shareholder distributions over multiple quarters.

Valero Energy Business Overview & Revenue Model

Company Description

Valero Energy Corporation manufactures, markets, and sells transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, and internationally. The company operates through three segments: Refining, Renewable Diesel, and Ethanol. It produces conventional, premium, and reformulated gasolines; gasoline meeting the specifications of the California Air Resources Board (CARB); diesel fuels, and low-sulfur and ultra-low-sulfur diesel fuels; CARB diesel; other distillates; jet fuels; blendstocks; and asphalts, petrochemicals, lubricants, and other refined petroleum products, as well as sells lube oils and natural gas liquids. As of December 31, 2021, the company owned 15 petroleum refineries with a combined throughput capacity of approximately 3.2 million barrels per day; and 12 ethanol plants with a combined ethanol production capacity of approximately 1.6 billion gallons per year. It sells its refined products through wholesale rack and bulk markets; and through approximately 7,000 outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brands. The company also produces and sells ethanol, dry distiller grains, syrup, and inedible corn oil primarily to animal feed customers. In addition, it owns and operates crude oil and refined petroleum products pipelines, terminals, tanks, marine docks, truck rack bays, and other logistics assets; and owns and operates a plant that processes animal fats, used cooking oils, and inedible distillers corn oils into renewable diesel. The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1980 and is headquartered in San Antonio, Texas.

How the Company Makes Money

Valero Energy generates revenue primarily through the refining of crude oil into finished petroleum products, which is its largest revenue stream. The company operates a network of refineries that process a variety of crude oil types, allowing it to maximize margins based on market conditions. In addition to traditional fuels, Valero also produces renewable fuels, including biodiesel and ethanol, which contribute to its revenue, especially as demand for green energy increases. Another significant revenue source is the sale of petrochemical products, which are derived from the refining process and used in various industries. Valero's strategic partnerships with suppliers and customers, along with its investments in technology and optimization of refining processes, further enhance its profitability. The company also engages in marketing and logistics, which support its distribution of fuels and chemicals, adding to its revenue diversification.

Valero Energy Financial Statement Overview

Summary

Cash flow is the key strength (strong free cash flow growth and healthy cash conversion), supported by a stable balance sheet with manageable leverage. Offsetting this, the income statement shows negative TTM revenue growth and lower margins versus prior periods, indicating profitability pressure despite remaining positive.

Income Statement

Valero Energy's income statement shows a mixed performance. The company has experienced a decline in revenue growth, with a negative growth rate in the TTM period. Profit margins have also decreased compared to previous years, indicating pressure on profitability. However, the company maintains positive net profit and EBIT margins, suggesting some level of operational efficiency. The gross profit margin remains low, which is typical for the industry but indicates limited pricing power.

Balance Sheet

The balance sheet reflects a moderate financial position. Valero Energy has a manageable debt-to-equity ratio, indicating a balanced approach to leveraging. The return on equity has decreased significantly from previous years, suggesting reduced profitability for shareholders. The equity ratio is stable, reflecting a solid asset base. Overall, the balance sheet shows stability but highlights potential risks if profitability does not improve.

Cash Flow

Valero Energy's cash flow statement shows a positive trend in free cash flow growth in the TTM period, indicating improved cash generation capabilities. The operating cash flow to net income ratio is healthy, suggesting efficient cash conversion from earnings. The free cash flow to net income ratio is strong, reflecting effective cash management. Despite past fluctuations, the current cash flow position is robust, supporting financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	123.07B	129.88B	144.77B	176.38B	113.98B	64.91B
Gross Profit	4.11B	4.76B	12.89B	16.75B	3.08B	-788.00M
EBITDA	5.39B	7.03B	14.66B	18.34B	4.55B	904.00M
Net Income	1.50B	2.77B	8.84B	11.53B	930.00M	-1.43B
Balance Sheet
Total Assets	58.62B	60.14B	63.06B	60.98B	57.89B	51.77B
Cash, Cash Equivalents and Short-Term Investments	4.76B	4.66B	5.42B	4.86B	4.12B	3.31B
Total Debt	10.58B	11.54B	12.64B	12.72B	15.13B	15.85B
Total Liabilities	31.87B	32.62B	34.53B	35.51B	38.07B	32.13B
Stockholders Equity	23.75B	24.51B	26.35B	23.56B	18.43B	18.80B
Cash Flow
Free Cash Flow	4.36B	5.78B	8.32B	10.89B	4.19B	-840.00M
Operating Cash Flow	4.84B	6.68B	9.23B	12.57B	5.86B	948.00M
Investing Cash Flow	-1.97B	-1.98B	-1.86B	-2.81B	-2.16B	-2.42B
Financing Cash Flow	-3.21B	-5.05B	-6.94B	-8.85B	-2.85B	2.08B

Valero Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 197.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLO, the sentiment is Positive. The current price of 197.41 is above the 20-day moving average (MA) of 185.37, above the 50-day MA of 176.47, and above the 200-day MA of 153.21, indicating a bullish trend. The MACD of 3.80 indicates Negative momentum. The RSI at 68.45 is Neutral, neither overbought nor oversold. The STOCH value of 67.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VLO.

Valero Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VLO	70 Outperform	$60.21B	25.40	9.71%	2.74%	-8.48%	-56.92%
PSX	70 Outperform	$62.33B	40.47	5.38%	3.68%	-10.56%	-53.06%
MPC	69 Neutral	$58.89B	14.19	19.33%	2.24%	-6.37%	-25.83%
DINO	68 Neutral	$10.45B	26.29	4.07%	4.26%	-9.55%	27.65%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
PBF	49 Neutral	$4.09B	-7.57	-9.47%	4.14%	-15.35%	-81.94%
DK	45 Neutral	$1.96B	-4.00	-115.95%	3.42%	-22.37%	-27.22%

Valero Energy Corporate Events

Valero Energy Appoints New CFO Amid Leadership Transition

On October 28, 2025, Valero Energy Corporation announced the appointment of Homer Bhullar as Senior Vice President and Chief Financial Officer, effective January 1, 2026. Bhullar, who has been with Valero since 2014 and served in various leadership roles, will succeed Jason Fraser, who is set to retire at the end of 2025 after over 25 years with the company. This transition is part of Valero’s succession planning and is expected to support the company’s strategic objectives and financial strength.

The most recent analyst rating on (VLO) stock is a Buy with a $190.00 price target. To see the full list of analyst forecasts on Valero Energy stock, see the VLO Stock Forecast page.