Valero Energy (VLO)
NYSE:VLO
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Valero Energy
(NYSE:VLO)
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Rating:69Neutral
Price Target:
$262.00
â–²(9.71% Upside)
Action:DowngradedDate:02/26/26
The score is driven primarily by solid financial resilience (improving leverage and strong free cash flow despite cyclically weaker earnings) and supportive technical momentum (price above key moving averages with positive MACD). The latest earnings call adds support via strong operational execution and shareholder-return discipline, while valuation (P/E 26.33 with a ~2.30% yield) tempers the overall score.
Positive Factors
Cash generation
Valero’s strong free cash flow and high cash conversion in 2025 provide a durable financial cushion across refining cycles. Consistent FCF funds sustaining capex, shareholder returns and debt reduction, enabling capital allocation discipline and resilience to commodity-driven earnings swings over months.
Negative Factors
Renewable diesel margin pressure
A near 46% drop in renewable diesel profits highlights structural margin risks from feedstock costs, policy uncertainty and tariff impacts. If persistent, lower returns from the renewables segment can slow decarbonization investments and reduce the company’s ability to diversify away from cyclical refining margins.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Valero’s strong free cash flow and high cash conversion in 2025 provide a durable financial cushion across refining cycles. Consistent FCF funds sustaining capex, shareholder returns and debt reduction, enabling capital allocation discipline and resilience to commodity-driven earnings swings over months.
Read all positive factors
Valero Energy (VLO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$71.41B
Dividend Yield2.74%
Average Volume (3M)4.50M
Price to Earnings (P/E)10.9
Beta (1Y)0.90
Revenue Growth-8.48%
EPS Growth-56.92%
CountryUS
Employees9,898
SectorEnergy
Sector Strength52
IndustryOil & Gas Refining & Marketing
Share Statistics
EPS (TTM)3.82
Shares Outstanding299,026,200
10 Day Avg. Volume3,281,242
30 Day Avg. Volume4,500,462
Financial Highlights & Ratios
PEG Ratio-1.82
Price to Book (P/B)2.12
Price to Sales (P/S)0.41
P/FCF Ratio10.00
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue0.62
Enterprise Value/Gross Profit11.46
Enterprise Value/Ebitda11.75
Forecast
1Y Price Target
$244.56Price Target Upside2.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
EPS Forecast (FY)20.49
Revenue Forecast (FY)$126.63B
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, Renew...
How the Company Makes Money
Valero makes money mainly by manufacturing and selling refined petroleum and renewable fuel products, earning margins based on the spread between input costs (crude oil and other feedstocks) and the market prices of its outputs (refined products)....
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 Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presents a predominantly positive operational and financial story: record throughput, improved refining earnings, stronger adjusted net income and robust cash returns supported by a healthy balance sheet and continued share repurchases/dividend growth. Offsetting items include a meaningful decline in renewable diesel profitability, costs and depreciation associated with the Benicia cessation, working capital and West Coast/ tariff-related headwinds, and short‑term margin risks from inventory builds and weaker fuel oil cracks. On balance, the company’s operational execution, cash generation and capital discipline outweigh the segment-specific and one-time headwinds.Positive Updates
Record Operational Performance
Record refining throughput for both Q4 and full year 2025 with system throughput averaging 3.1 million barrels per day (98% utilization); record ethanol production and record mechanical availability, reflecting improved reliability and operational execution.
Negative Updates
Renewable Diesel Segment Weakness
Renewable diesel operating income declined to $92 million in 2025 from $170 million in 2024 (down ~$78 million, ~46% decline). Management cited margin pressure, policy uncertainty, tariffs, fat price weakness and capacity offline as drivers of near-term headwinds.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Operational Performance
Record refining throughput for both Q4 and full year 2025 with system throughput averaging 3.1 million barrels per day (98% utilization); record ethanol production and record mechanical availability, reflecting improved reliability and operational execution.
Read all positive updates
Company Guidance
Valero guided 2026 capital investments attributable to the company of about $1.7 billion (roughly $1.4 billion sustaining and the balance for growth), and reiterated a through‑cycle minimum annual payout ratio of 40–50% of adjusted net cash provided by operating activities, a long‑term net debt‑to‑capital target of 20–30% and a minimum cash balance of $4–5 billion with all excess free cash flow to shareholder returns; for Q1 they expect refining throughput by region: Gulf Coast 1.695–1.745 MMb/d, Midcontinent 430–450 Mb/d, West Coast 160–180 Mb/d and North Atlantic 485–505 Mb/d, refining cash operating expenses of ~$5.17/boe, renewable diesel sales of ~260 million gallons (opex $0.72/gal including $0.35/gal noncash D&A), ethanol production around 4.6 million gallons/day (opex $0.49/gal including $0.05/gal noncash), net interest expense of about $140 million, total depreciation & amortization of ~ $835 million (including roughly $100 million incremental Benicia‑related D&A) with the Benicia D&A expected to reduce Q1 EPS by about $0.25/share, and 2026 G&A of approximately $960 million.Valero Energy Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
67
Positive
Cash Flow
73
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 122.69B | 129.88B | 144.77B | 176.38B | 113.98B |
| Gross Profit | 5.37B | 4.76B | 12.89B | 16.75B | 3.08B |
| EBITDA | 6.72B | 7.03B | 14.66B | 18.34B | 4.55B |
| Net Income | 2.35B | 2.77B | 8.84B | 11.53B | 930.00M |
Balance Sheet | |||||
| Total Assets | 47.50B | 60.14B | 63.06B | 60.98B | 57.89B |
| Cash, Cash Equivalents and Short-Term Investments | 4.69B | 4.66B | 5.42B | 4.86B | 4.12B |
| Total Debt | 10.62B | 11.54B | 12.64B | 12.72B | 15.13B |
| Total Liabilities | 23.78B | 32.62B | 34.53B | 35.51B | 38.07B |
| Stockholders Equity | 23.73B | 24.51B | 26.35B | 23.56B | 18.43B |
Cash Flow | |||||
| Free Cash Flow | 5.03B | 5.78B | 8.32B | 10.89B | 4.19B |
| Operating Cash Flow | 5.83B | 6.68B | 9.23B | 12.57B | 5.86B |
| Investing Cash Flow | -1.84B | -1.98B | -1.86B | -2.81B | -2.16B |
| Financing Cash Flow | -4.18B | -5.05B | -6.94B | -8.85B | -2.85B |
Valero Energy Technical Analysis
Neutral
238.82
Price Trends
219.37
Positive
196.97
Positive
174.59
Positive
Market Momentum
6.25
Positive
53.25
Neutral
23.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLO, the sentiment is Neutral. The current price of 238.82 is below the 20-day moving average (MA) of 241.46, above the 50-day MA of 219.37, and above the 200-day MA of 174.59, indicating a neutral trend. The MACD of 6.25 indicates Positive momentum. The RSI at 53.25 is Neutral, neither overbought nor oversold. The STOCH value of 23.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VLO.
Valero Energy Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $63.82B | 11.90 | 15.90% | 3.68% | -10.56% | -53.06% | |
69 Neutral | $71.41B | 10.87 | 9.88% | 2.74% | -8.48% | -56.92% | |
68 Neutral | $65.56B | 12.26 | 24.01% | 2.24% | -6.37% | -25.83% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | $10.37B | 14.84 | 6.25% | 4.26% | -9.55% | 27.65% | |
60 Neutral | $2.50B | 5.68 | -14.06% | 3.42% | -22.37% | -27.22% | |
57 Neutral | $4.76B | -19.51 | -3.05% | 4.14% | -15.35% | -81.94% |
* Energy Sector Average
VLO
Valero Energy
238.82
131.64
122.82%
DK
Delek US Holdings
41.74
29.72
247.17%
DINO
HF Sinclair Corporation
57.51
30.83
115.56%
MPC
Marathon Petroleum
222.62
100.39
82.14%
PSX
Phillips 66
159.25
64.90
68.78%
PBF
PBF Energy
40.67
26.15
180.15%
Valero Energy Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Valero Energy Announces New $850 Million Senior Notes
Neutral
Mar 9, 2026
On March 5, 2026, Valero Energy Corporation agreed to issue and sell $850 million aggregate principal amount of 5.150% senior notes due 2036 under an underwriting agreement with a syndicate of investment banks. The notes will be issued under an ex...
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.