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Valero Energy
(NYSE:VLO)
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Rating:77Outperform
Price Target:
$354.00
▲(17.02% Upside)
Action:Upgraded
Date:07/31/26
The score is driven primarily by strong financial performance (notably robust TTM free cash flow and improved profitability) and clear technical uptrend with price above all major moving averages. Offsetting these positives are a less compelling valuation profile (P/E 21.689 with a modest 1.517% yield) and earnings-call risks tied to execution (Port Arthur repairs) and policy/market volatility (RIN/D4 uncertainty and cyclical margin sustainability).
Positive Factors
Strong cash generation
Sustained high operating and free cash flow indicates the business converts earnings into liquidity reliably. This cash fungibility supports durable capital returns, debt management, and reinvestment in sustaining and growth projects across refining and renewables over the next 2–6 months.
Negative Factors
Port Arthur DHT damage and repair risk
A damaged DHT unit creates execution and downtime risk that can compress near-term throughput and margins. Even with insurance coverage, repair timing and residual costs can disrupt production, raise sustaining CapEx, and add operational uncertainty into the coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Sustained high operating and free cash flow indicates the business converts earnings into liquidity reliably. This cash fungibility supports durable capital returns, debt management, and reinvestment in sustaining and growth projects across refining and renewables over the next 2–6 months.
Read all positive factors
Valero Energy Key Performance Indicators (KPIs)
Any
Refining Operating Income by Geography
Highlights the profitability of refining activities in various locations, offering insight into regional performance and strategic positioning.
Highlights the profitability of refining activities in various locations, offering insight into regional performance and strategic positioning.
Data provided by:
The Fly
The FlyValero Energy (VLO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$90.09B
Dividend Yield1.51%
Average Volume (3M)3.08M
Price to Earnings (P/E)13.0
Beta (1Y)0.69
Revenue Growth12.92%
EPS Growth898.48%
CountryUS
Employees9,811
SectorEnergy
Sector Strength52
IndustryOil & Gas Refining & Marketing
Share Statistics
EPS (TTM)24.12
Shares Outstanding287,927,460
10 Day Avg. Volume2,975,725
30 Day Avg. Volume3,077,658
Financial Highlights & Ratios
PEG Ratio-1.83
Price to Book (P/B)2.12
Price to Sales (P/S)0.41
P/FCF Ratio10.00
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$317.67Price Target Upside5.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)38.27
Revenue Forecast (FY)$146.54B
Valero Energy Business Overview & Revenue Model
Company Description
Valero Energy Corporation (VLO) is a downstream energy company primarily engaged in petroleum refining, renewable diesel production, and ethanol manufacturing. The company operates refineries that process crude oil and other feedstocks into transp...
How the Company Makes Money
Valero makes money mainly by manufacturing fuels and related products and selling them into wholesale markets. Its largest earnings driver is petroleum refining: Valero buys crude oil and other refinery feedstocks, processes them in its refineries...
Valero Energy Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call highlights a very strong quarter with record earnings, robust cash generation, materially improved segment profitability (refining, renewable diesel and ethanol), a strengthened balance sheet and continued disciplined capital allocation. Management presented positive forward guidance for throughput, operating costs and renewables strength (driven by RVO/D4 and production tax credits). Notable risks discussed include damage and repair costs at Port Arthur, RIN market shortness and policy uncertainty, ongoing geopolitical supply disruptions (Russia/Middle East) that could prolong tight product markets, and near-term financing and maintenance timing considerations. On balance the call emphasized operational execution, sizable profits and financial flexibility while acknowledging several execution and policy risks that could affect sustainability of current margins.Positive Updates
Record quarterly earnings and EPS
Net income attributable to Valero stockholders of $3.7 billion in Q2 2026 versus $714 million in Q2 2025 (≈+418%); GAAP EPS of $12.62 vs $2.28 in prior-year quarter (≈+454%); adjusted EPS $12.54.
Negative Updates
Port Arthur DHT unit damage and repair costs
DHT unit at Port Arthur requires repairs with total estimated cost ~$250 million (included in sustaining CapEx guidance); company expects substantial portion to be covered by insurance, though repair timing and final cost are risks.
Read all updates
Q2-2026 Updates
Positive
Negative
Record quarterly earnings and EPS
Net income attributable to Valero stockholders of $3.7 billion in Q2 2026 versus $714 million in Q2 2025 (≈+418%); GAAP EPS of $12.62 vs $2.28 in prior-year quarter (≈+454%); adjusted EPS $12.54.
Read all positive updates
Company Guidance
Valero guided 2026 capital investments attributable to the company of about $2.0 billion (roughly $1.7 billion sustaining and the remainder growth), including an estimated $250 million to repair the Port Arthur DHT unit (expected back in service by year‑end; largely insured). For Q3 they expect refining throughput of Gulf Coast 1.78–1.83 million bpd, Mid‑Continent 460–480 thousand bpd, West Coast 110–120 thousand bpd and North Atlantic 450–470 thousand bpd, with refining cash operating expenses of about $4.75/barrel. Renewable diesel sales volumes are expected at ~3.5 million gallons/day with operating expenses ~$0.49/gal (including ~$0.21/gal noncash), ethanol production ~4.8 million gallons/day with operating expenses ~$0.39/gal (including ~$0.04/gal noncash), Q3 net interest expense ≈ $140 million, total Q3 depreciation & amortization ≈ $700 million, and G&A for the year ≈ $960 million.Valero Energy Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
72
Positive
Cash Flow
81
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 132.93B | 122.69B | 129.88B | 144.77B | 176.38B | 113.98B |
| Gross Profit | 15.06B | 5.37B | 4.76B | 12.89B | 16.75B | 3.08B |
| EBITDA | 13.26B | 6.72B | 7.03B | 14.66B | 18.34B | 4.55B |
| Net Income | 7.21B | 2.35B | 2.77B | 8.84B | 11.53B | 930.00M |
Balance Sheet | ||||||
| Total Assets | 64.66B | 57.99B | 60.14B | 63.06B | 60.98B | 57.89B |
| Cash, Cash Equivalents and Short-Term Investments | 7.87B | 4.69B | 4.66B | 5.42B | 4.86B | 4.12B |
| Total Debt | 11.35B | 11.70B | 11.54B | 12.64B | 12.72B | 15.13B |
| Total Liabilities | 36.40B | 31.38B | 32.62B | 34.53B | 35.51B | 38.07B |
| Stockholders Equity | 25.00B | 23.73B | 24.51B | 26.35B | 23.56B | 18.43B |
Cash Flow | ||||||
| Free Cash Flow | 10.09B | 5.03B | 5.78B | 8.32B | 10.89B | 4.19B |
| Operating Cash Flow | 10.91B | 5.83B | 6.68B | 9.23B | 12.57B | 5.86B |
| Investing Cash Flow | -1.56B | -1.84B | -1.98B | -1.86B | -2.81B | -2.16B |
| Financing Cash Flow | -5.86B | -4.18B | -5.05B | -6.94B | -8.85B | -2.85B |
Valero Energy Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $16.26B | 8.69 | 19.86% | 2.27% | 16.26% | ― | |
77 Outperform | $90.09B | 12.97 | 29.94% | 1.54% | 12.92% | 898.48% | |
74 Outperform | $8.57B | 6.29 | 24.08% | 1.78% | 13.54% | ― | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
65 Neutral | $92.39B | 20.64 | 27.33% | 1.26% | -1.29% | 114.86% | |
56 Neutral | $84.87B | 20.77 | 14.72% | 2.39% | -1.33% | 130.72% | |
53 Neutral | $4.16B | -78.01 | -37.66% | 1.61% | -6.49% | 93.38% |
* Energy Sector Average
VLO
Valero Energy
307.54
173.55
129.53%
DK
Delek US Holdings
66.01
45.66
224.31%
DINO
HF Sinclair Corporation
88.65
46.47
110.16%
MPC
Marathon Petroleum
307.03
141.35
85.32%
PSX
Phillips 66
206.19
88.17
74.70%
PBF
PBF Energy
67.91
45.05
197.07%
Valero Energy Corporate Events
Business Operations and StrategyStock Buyback
Valero Energy Expands Share Repurchase Authorization Program
Positive
Jul 17, 2026
On February 25, 2026, Valero’s board authorized a share repurchase program allowing the company to buy back up to $2.5 billion of its common stock with no expiration date. As of June 30, 2026, $1.4 billion remained available under this Febru...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Valero Energy Announces Leadership Transition and Board Decisions
Positive
May 8, 2026
Valero Energy reported that Eric A. Fisher, Senior Vice President for Product Supply, Trading and Wholesale, notified the company on May 7, 2026 that he intends to retire around July 1, 2026, and will assist with transitioning his responsibilities...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.