Valero Energy (VLO) AI Stock Analysis

• Market Cap: $43.23B
• Dividend Yield: 3.28%
• Average Volume (3M): 3.05M
• Price to Earnings (P/E): 48.7
• Beta (1Y): 1.01
• Revenue Growth: -8.44%
• EPS Growth: -85.95%
• Country: US
• Employees: 9,898
• Sector: Energy
• Sector Strength: 47
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 0.89
• Shares Outstanding: 313,206,120
• 10 Day Avg. Volume: 3,777,871
• 30 Day Avg. Volume: 3,052,568
• PEG Ratio: -0.62
• Price to Book (P/B): 1.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.36
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 0.08
• Enterprise Value/Gross Profit: 13.61
• Enterprise Value/Ebitda: 1.46
• 1Y Price Target: $144.63
• Price Target Upside: 1.81% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

• Rating: 66 Neutral
• Price Target: $153.00 ▲(7.70%Upside)

Valero Energy's overall score reflects its solid financial performance and cash flow management, which are offset by valuation concerns and regulatory challenges. The technical analysis indicates potential overvaluation in the short term, while the earnings call points to significant operational hurdles. Despite these issues, the company's commitment to shareholder returns and operational excellence remains a positive aspect.

Positive Factors

Financial Performance

Valero Energy Corporation is committed to strong capital returns, with expectations to exceed its minimum payout commitment.

Market Position

Valero Energy Corporation is viewed as a key beneficiary of tighter supply and demand dynamics, which should support continued refining margin improvements.

Negative Factors

Demand Concerns

Consensus revisions are better reflecting the deceleration in refining profitability with VLO 2025 EPS having been negatively revised by ~50% over the last year.

Economic Outlook

Slow demand to pressure 2025F, hit by slower-than-expected global economic activities.

Valero Energy Business Overview & Revenue Model

Company Description

Valero Energy Corporation (VLO) is a leading international manufacturer and marketer of transportation fuels, petrochemical products, and power. Based in San Antonio, Texas, Valero operates through three main segments: refining, ethanol, and renewable diesel. The company owns and operates 15 petroleum refineries with a total throughput capacity of approximately 3.2 million barrels per day, as well as 14 ethanol plants with a combined production capacity of 1.73 billion gallons per year. Valero is also a major participant in the renewable fuels market through its Diamond Green Diesel joint venture, producing renewable diesel from biomass feedstocks.

How the Company Makes Money

Valero Energy makes money primarily through its refining operations, which involve processing crude oil and other feedstocks into gasoline, diesel, jet fuel, and other petroleum-based products. The company sells these products to wholesale and retail customers, including major oil companies, independent refiners, and other end-users. A significant portion of Valero's revenue also comes from its ethanol production, where the company converts corn into ethanol to be blended with gasoline as an oxygenate to reduce emissions. Additionally, Valero generates revenue from its renewable diesel operations, which benefit from government incentives and growing demand for low-carbon fuels. The company's earnings are influenced by factors such as crude oil prices, refining margins, government regulations, and strategic partnerships, including its joint venture with Darling Ingredients for renewable diesel production.

Valero Energy Financial Statement Overview

Summary

Valero Energy demonstrates a commendable financial position with stable profitability, prudent leverage, and strong cash flow management. However, the decline in revenue and return on equity signals areas for improvement. Overall, Valero is well-positioned to navigate market fluctuations and leverage its strong cash flow for continued growth.

Income Statement

Valero Energy shows resilience in its income statement. The TTM data reveal a gross profit margin of 2.47% and a net profit margin of 0.72%, indicating modest profitability. Although revenue declined slightly from the previous year, the company has maintained positive EBIT and EBITDA margins, showcasing operational efficiency in a challenging market. The revenue growth rate is negative due to market conditions, but the company remains profitable.

Balance Sheet

Valero's balance sheet is strong, with a debt-to-equity ratio of 0.46, indicating prudent leverage levels. The equity ratio stands at 39.70%, reflecting solid capitalization. However, the return on equity has decreased to 3.96% in the TTM, suggesting reduced profitability compared to previous years. The company maintains healthy liquidity, but overall asset growth has slowed.

Cash Flow

Valero's cash flow statement is robust, with a free cash flow of $4.86 billion in the TTM, showing a strong recovery from past volatility. The operating cash flow to net income ratio of 6.22 indicates efficient cash generation relative to earnings. Although capital expenditures have increased, the company effectively manages its cash flows, ensuring financial stability and operational flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	128.38B	129.88B	144.77B	176.38B	113.98B	64.91B
Gross Profit	3.29B	4.76B	12.90B	16.75B	3.08B	-788.00M
EBITDA	4.42B	7.03B	14.66B	18.34B	4.55B	904.00M
Net Income	930.00M	2.77B	8.84B	11.53B	1.29B	-1.11B
Balance Sheet
Total Assets	59.18B	60.14B	63.06B	60.98B	57.89B	51.77B
Cash, Cash Equivalents and Short-Term Investments	4.63B	4.66B	5.42B	4.86B	4.12B	3.31B
Total Debt	10.85B	11.54B	12.64B	3.57B	1.92B	15.85B
Total Liabilities	32.86B	32.62B	34.53B	35.51B	38.07B	32.13B
Stockholders Equity	23.49B	24.51B	26.35B	23.56B	18.43B	18.80B
Cash Flow
Free Cash Flow	4.61B	5.78B	8.32B	-1.02B	-1.23B	-770.00M
Operating Cash Flow	5.79B	6.68B	9.23B	661.00M	439.00M	1.02B
Investing Cash Flow	-1.98B	-1.98B	-1.86B	-2.81B	-2.16B	-2.42B
Financing Cash Flow	-3.79B	-5.05B	-6.94B	-8.85B	-2.85B	2.08B

Valero Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 142.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 142.06 is above the 20-day moving average (MA) of 134.92, above the 50-day MA of 128.16, and above the 200-day MA of 129.08, indicating a bullish trend. The MACD of 2.78 indicates Positive momentum. The RSI at 64.82 is Neutral, neither overbought nor oversold. The STOCH value of 52.84 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	76 Outperform	$50.18B	28.09	6.48%	3.90%	-7.61%	-66.18%
SUN	73 Outperform	$8.11B	9.54	26.11%	6.77%	-3.59%	22.77%
MPC	72 Outperform	$52.21B	23.87	12.37%	2.14%	-6.39%	-64.50%
Sector *	67 Neutral	$14.88B	9.77	6.38%	5.30%	4.12%	-66.77%
VLO	66 Neutral	$43.23B	48.66	3.73%	3.28%	-8.44%	-85.95%
DINO	66 Neutral	$7.93B	35.13	-1.49%	4.75%	-11.17%	-109.60%
PBF	48 Neutral	$2.58B	―	-18.01%	4.94%	-16.30%	-160.78%

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.