Valero Energy (VLO) AI Stock Analysis

• Market Cap: $47.22B
• Dividend Yield: 2.89%
• Average Volume (3M): 2.53M
• Price to Earnings (P/E): 64.0
• Beta (1Y): 1.02
• Revenue Growth: -11.72%
• EPS Growth: -86.21%
• Country: US
• Employees: 9,898
• Sector: Energy
• Sector Strength: 70
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 2.28
• Shares Outstanding: 310,651,730
• 10 Day Avg. Volume: 2,111,086
• 30 Day Avg. Volume: 2,531,477
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.08
• Enterprise Value/Revenue: 0.41
• Enterprise Value/Gross Profit: 16.53
• Enterprise Value/Ebitda: 11.89
• 1Y Price Target: $159.15
• Price Target Upside: 3.16% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 73 Outperform
• Price Target: $168.00 ▲(8.89% Upside)

Valero Energy's overall stock score reflects strong technical momentum and operational efficiency, despite high leverage and potential overvaluation concerns. The company's commitment to shareholder returns and strategic debt management are positive, but challenges in the Renewable Diesel segment and declining net income are notable risks.

Positive Factors

Cash Flow Management

VLO reiterated that it will payout at least 40% - 50% of annual cash flow and is in a position to return all excess cash flow.

Financial Performance

VLO had a positive refining outlook despite seasonal downside in gasoline.

Market Position

Strong export demand is noted with open arbitrages to Europe, benefiting the company's market position.

Negative Factors

Earnings Growth Limitations

There is potential for stabilization-to-downside from here given bullishness reflected in the stock and limited underlying earnings growth.

Market Valuation

The current valuation implies an historically strong refining outlook that is difficult to justify, even accounting for improved capture rates.

Profitability Challenges

Renewable Diesel segment faces challenges with rising feedstock costs and softer credit values, impacting profitability.

Valero Energy Business Overview & Revenue Model

Company Description

Valero Energy Corporation is a global manufacturer and marketer of transportation fuels and petrochemical products. Headquartered in San Antonio, Texas, the company operates 15 refineries with a combined throughput capacity of approximately 3.2 million barrels per day, making it one of the largest independent refiners in the world. Valero also produces renewable diesel and ethanol, contributing to its portfolio of clean energy solutions. The company serves various markets, including retail, commercial, and industrial sectors, primarily in the United States and Canada.

How the Company Makes Money

Valero Energy generates revenue primarily through the refining of crude oil into petroleum products, including gasoline, diesel, and jet fuel. The company operates on a margin-based model where it purchases crude oil and other feedstocks and sells the refined products at higher prices. Key revenue streams include sales of refined petroleum products, renewable fuels, and petrochemicals. Additionally, Valero benefits from its extensive network of retail convenience stores and fuel stations, which provide a direct consumer channel. The company also engages in strategic partnerships, including collaborations with renewable energy ventures, which enhance its product offerings and contribute to its earnings. Market factors such as crude oil prices, refining margins, and demand for gasoline and diesel significantly influence Valero's financial performance.

Valero Energy Financial Statement Overview

Summary

Valero Energy demonstrates resilience in its financial performance with strong operational efficiency and cash flow generation, despite revenue fluctuations. The high leverage poses a potential risk, but a solid equity base provides stability. Overall, the company is well-positioned within the Oil & Gas Refining & Marketing industry but must manage its leverage to mitigate financial risks.

Income Statement

Valero Energy's revenue has shown volatility, with a recent decline in TTM compared to previous years. However, the company maintains a respectable gross profit margin of 2.54% and a net profit margin of 0.62% in TTM. The EBIT and EBITDA margins are relatively stable, indicating operational efficiency. Despite recent revenue fluctuations, the company shows resilience in maintaining profitability.

Balance Sheet

Valero Energy's balance sheet reveals a high debt-to-equity ratio of 1.42, indicating significant leverage. The return on equity (ROE) is modest at 3.17%, reflecting moderate profitability for equity holders. The equity ratio is a solid 19.94%, showcasing a strong asset base against liabilities. While leverage is a concern, the company maintains a stable equity position.

Cash Flow

The company's cash flow statement shows strong free cash flow generation with a recent growth rate of -35.23% in TTM, reflecting challenges in maintaining previous cash flow levels. The operating cash flow to net income ratio is robust at 5.57, indicating efficient cash generation relative to net income. However, the free cash flow to net income ratio highlights some constraints in fully translating earnings to free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	123.78B	129.88B	144.77B	176.38B	113.98B	64.91B
Gross Profit	3.08B	4.76B	12.89B	16.75B	3.08B	-788.00M
EBITDA	4.28B	7.03B	14.66B	18.34B	4.55B	904.00M
Net Income	764.00M	2.77B	8.84B	11.53B	930.00M	-1.43B
Balance Sheet
Total Assets	59.43B	60.14B	63.06B	60.98B	57.89B	51.77B
Cash, Cash Equivalents and Short-Term Investments	4.54B	4.66B	5.42B	4.86B	4.12B	3.31B
Total Debt	10.65B	11.54B	12.64B	12.72B	15.13B	15.85B
Total Liabilities	32.49B	32.62B	34.53B	35.51B	38.07B	32.13B
Stockholders Equity	24.08B	24.51B	26.35B	23.56B	18.43B	18.80B
Cash Flow
Free Cash Flow	3.74B	5.78B	8.32B	10.89B	4.19B	-840.00M
Operating Cash Flow	4.25B	6.68B	9.23B	12.57B	5.86B	948.00M
Investing Cash Flow	-2.00B	-1.98B	-1.86B	-2.81B	-2.16B	-2.42B
Financing Cash Flow	-3.09B	-5.05B	-6.94B	-8.85B	-2.85B	2.08B

Valero Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 154.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 154.28 is above the 20-day moving average (MA) of 141.59, above the 50-day MA of 141.55, and above the 200-day MA of 130.42, indicating a bullish trend. The MACD of 4.05 indicates Negative momentum. The RSI at 75.41 is Negative, neither overbought nor oversold. The STOCH value of 91.39 is Negative, 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
DINO	74 Outperform	$9.52B	35.13	-0.93%	3.84%	-14.58%	-107.50%
VLO	73 Outperform	$47.22B	63.97	3.07%	2.89%	-11.72%	-86.21%
PSX	70 Outperform	$53.98B	32.21	6.00%	3.51%	-12.80%	-64.40%
SUN	66 Neutral	$8.00B	25.69	6.62%	6.92%	-8.65%	-73.25%
Sector *	66 Neutral	$15.43B	7.32	3.20%	5.24%	4.22%	-60.66%
MPC	65 Neutral	$54.64B	26.62	11.24%	2.02%	-10.03%	-64.63%
PBF	51 Neutral	$3.16B	―	-17.30%	3.86%	-18.73%	-236.79%

Valero Energy Corporate Events

Valero Energy Holds Annual Stockholders’ Meeting

On May 6, 2025, Valero Energy Corporation held its annual stockholders’ meeting where director Robert A. Profusek retired in line with the company’s retirement policy. During the meeting, all director nominees were successfully elected to serve until the 2026 annual meeting, and key proposals, including executive compensation and the appointment of KPMG LLP as the independent accounting firm, were approved. Additionally, Valero entered into a Stock Unit Award Agreement with its re-elected non-employee directors, granting stock units valued at $200,000 each, which will vest at the 2026 annual meeting, reflecting the company’s commitment to aligning director compensation with shareholder interests.