Valero Energy (VLO) AI Stock Analysis

• Market Cap: $56.89B
• Dividend Yield: 2.74%
• Average Volume (3M): 3.29M
• Price to Earnings (P/E): 38.8
• Beta (1Y): 1.14
• 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): 3.66
• Shares Outstanding: 305,009,550
• 10 Day Avg. Volume: 4,411,822
• 30 Day Avg. Volume: 3,291,701
• 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: 1.08
• Enterprise Value/Revenue: 0.50
• Enterprise Value/Gross Profit: 14.95
• Enterprise Value/Ebitda: 11.38
• 1Y Price Target: $190.13
• Price Target Upside: 3.01% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 12.15
• Revenue Forecast (FY): $111.93B

• Rating: 66 Neutral
• Price Target: $195.00 ▲(5.65% Upside)

The score is supported most by solid cash generation and stable leverage, reinforced by a constructive earnings update (strong utilization and shareholder returns). It is held back by weaker revenue/margin trends and a demanding valuation (high P/E), while technicals are positive on trend but show slowing momentum (negative MACD with elevated RSI).

Positive Factors

Free Cash Flow Strength

Sustained free cash flow growth and healthy operating cash conversion provide durable funding for sustaining capex, debt service, and shareholder returns. Strong cash generation improves financial flexibility across cycles and supports reinvestment in efficiency or renewables over the next several quarters.

High Refinery Utilization

Near-record 97% throughput utilization reflects operational resilience and ability to capture margin upside through superior asset availability. High utilization improves fixed-cost absorption and supports sustainable margin recovery when industry fundamentals normalize, bolstering medium-term profitability.

Extended Liquidity Facility

Extending the revolver to 2030 and boosting capacity to $5.5B materially lowers refinancing risk and adds strategic liquidity. This durable improvement in funding flexibility supports capital allocation plans, shields operations during downturns, and enables measured investment or opportunistic M&A.

Negative Factors

Declining Revenue Trend

A nearly 8.5% revenue decline signals weakening top-line momentum and suggests pressure on market demand or product mix. Persisting revenue contraction can erode scale advantages, constrain margin recovery, and limit the firm's ability to fund growth or returns without cutting costs or raising leverage.

Renewable Diesel Losses and Closure Costs

Operating loss in renewable diesel, coupled with incremental Benicia closure depreciation, highlights execution and transition costs. Persistent losses or asset write-downs can strain earnings and cash allocation, complicating long-term shift to low-carbon fuels and delaying returns on green investments.

Weakened Return on Equity

A marked decline in ROE indicates lower capital efficiency and weaker shareholder profitability. If this trend persists, it constrains the company's ability to sustain dividend and buyback policies, reduces reinvestment capacity, and may necessitate strategic changes to restore long-term returns.

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

Valero Energy's financial statements present a mixed picture. The company faces challenges with declining revenue growth and profitability pressures, as seen in the income statement. However, the balance sheet remains stable with manageable leverage, and the cash flow statement indicates strong cash generation capabilities. While there are areas of concern, particularly in profitability, the company's financial position is supported by solid cash flow performance.

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: 184.58
• 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 184.58 is above the 20-day moving average (MA) of 172.74, above the 50-day MA of 173.93, and above the 200-day MA of 148.32, indicating a bullish trend. The MACD of 4.08 indicates Negative momentum. The RSI at 60.02 is Neutral, neither overbought nor oversold. The STOCH value of 66.10 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
PSX	69 Neutral	$56.97B	38.64	5.38%	3.68%	-10.56%	-53.06%
DINO	68 Neutral	$9.30B	24.33	4.07%	4.26%	-9.55%	27.65%
MPC	66 Neutral	$54.44B	19.31	15.98%	2.24%	-6.37%	-25.83%
VLO	66 Neutral	$56.89B	38.82	6.07%	2.74%	-8.48%	-56.92%
Sector *	65 Neutral	$15.17B	7.61	4.09%	5.20%	3.87%	-62.32%
PBF	49 Neutral	$3.76B	-6.69	-9.47%	4.14%	-15.35%	-81.94%
DK	45 Neutral	$1.81B	-3.55	-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.

Valero Energy Amends Credit Agreement for Flexibility

On October 16, 2025, Valero Energy Corporation amended its revolving credit agreement, extending the maturity date to October 16, 2030, and increasing the potential revolving commitment to $5.5 billion. This move is aimed at enhancing the company’s financial flexibility for general corporate purposes, potentially impacting its operational capabilities and market positioning.

The most recent analyst rating on (VLO) stock is a Hold with a $162.00 price target. To see the full list of analyst forecasts on Valero Energy stock, see the VLO Stock Forecast page.