Valero Energy (VLO)
NYSE:VLO
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Valero Energy
(NYSE:VLO)
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Rating:67Neutral
Price Target:
$274.00
▲(22.51% Upside)
Action:DowngradedDate:05/01/26
The score is driven by improved TTM profitability and strong free cash flow, supported by positive price momentum (uptrend above key moving averages). It is tempered by cyclical earnings sensitivity and the TTM leverage increase, while valuation is favorable and the latest earnings call was constructive but flagged meaningful operational uncertainty from the Port Arthur incident.
Positive Factors
Free cash flow conversion
Sustained strong FCF (~$6.1B TTM) with conversion near 1.0 indicates high earnings quality and internal funding capacity. This durable cash generation supports capex, dividends, buybacks and de-leveraging over multiple quarters, improving long-term financial flexibility.
Negative Factors
TTM leverage step-up
A sharp TTM increase in leverage (debt-to-equity ~1.37) reduces financial flexibility and raises refinancing risk if margins weaken. Higher leverage amplifies earnings cyclicality impacts, constrains discretionary capital during down cycles, and heightens vulnerability to commodity-driven shocks.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow conversion
Sustained strong FCF (~$6.1B TTM) with conversion near 1.0 indicates high earnings quality and internal funding capacity. This durable cash generation supports capex, dividends, buybacks and de-leveraging over multiple quarters, improving long-term financial flexibility.
Read all positive factors
Valero Energy (VLO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$75.51B
Dividend Yield2.74%
Average Volume (3M)4.21M
Price to Earnings (P/E)14.6
Beta (1Y)0.78
Revenue Growth-2.53%
EPS Growth385.02%
CountryUS
Employees9,898
SectorEnergy
Sector Strength52
IndustryOil & Gas Refining & Marketing
Share Statistics
EPS (TTM)4.22
Shares Outstanding298,953,670
10 Day Avg. Volume3,401,670
30 Day Avg. Volume4,207,780
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 Cap1.07
Enterprise Value/Revenue0.64
Enterprise Value/Gross Profit8.88
Enterprise Value/Ebitda8.90
Forecast
1Y Price Target
$251.38Price Target Upside12.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
EPS Forecast (FY)24.43
Revenue Forecast (FY)$131.77B
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:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call highlights a strong operational and financial recovery in Q1 2026 with sizable swings to profitability across refining, renewable diesel and ethanol. Management emphasized disciplined capital allocation, a robust balance sheet, and proactive risk/hedge management while providing detailed near-term guidance. Key challenges include the Port Arthur fire (uncertain repair timeline and potential incremental capex), Benicia idling-related depreciation, tight global product markets (jet/distillate shortages), feedstock (VGO) constraints, and capture-rate headwinds from backwardation and freight volatility. Overall, the positive financial and liquidity metrics and clear operational execution outweigh the operational and market headwinds discussed.Positive Updates
Strong Net Income and EPS Turnaround
Net income attributable to Valero stockholders of $1.3 billion in Q1 2026 (EPS $4.22) versus a net loss of $595 million in Q1 2025 (EPS -$1.90) — a positive swing of $1.895 billion and EPS improvement of $6.12.
Negative Updates
Port Arthur Hydrotreater Fire and Operational Impact
Fire on March 23 in the diesel hydrotreater forced a precautionary full shutdown; while many units were restarted and throughput expected to normalize by May 1, the diesel hydrotreater sustained extensive damage with no rebuild timeline yet. Kerosen e hydrotreater expected back by Q3; impacts could reduce capture rates and require additional 2026 capex (expected to be insurance-covered subject to deductibles).
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Net Income and EPS Turnaround
Net income attributable to Valero stockholders of $1.3 billion in Q1 2026 (EPS $4.22) versus a net loss of $595 million in Q1 2025 (EPS -$1.90) — a positive swing of $1.895 billion and EPS improvement of $6.12.
Read all positive updates
Company Guidance
Valero’s guidance called for Q2 refining throughput of Gulf Coast 1.69–1.74 million bpd, Mid‑Continent 450,000–470,000 bpd, West Coast 120,000–130,000 bpd (Benicia idled) and North Atlantic 480,000–500,000 bpd, with refining cash operating expenses of ~ $4.85/boe; Renewable Diesel sales of ~320 million gallons in Q2 with operating expenses of ~$0.46/gal (including ~$0.22/gal non‑cash D&A); Ethanol production of ~4.7 million gallons/day with operating expenses of ~$0.39/gal (including ~$0.04/gal non‑cash D&A); Q2 net interest expense of ~ $145 million and total Q2 depreciation & amortization of ~ $730 million (including ~$33 million incremental D&A from Benicia) with the Benicia incremental D&A expected to reduce Q2 EPS by roughly $0.09; 2026 G&A is expected to be ~ $960 million; the Port Arthur diesel hydrotreater fire will require additional 2026 capital expenditures (expected to be covered by insurance subject to deductibles) and Valero will update 2026 CapEx guidance when a definitive cost estimate and repair timeline are available, while prior guidance outside Port Arthur for sustaining and growth projects remains unchanged.Valero Energy Financial Statement Overview
Summary
Income Statement
67
Positive
Balance Sheet
48
Neutral
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 126.17B | 122.69B | 129.88B | 144.77B | 176.38B | 113.98B |
| Gross Profit | 9.13B | 5.37B | 4.76B | 12.89B | 16.75B | 3.08B |
| EBITDA | 9.11B | 6.72B | 7.03B | 14.66B | 18.34B | 4.55B |
| Net Income | 4.21B | 2.35B | 2.77B | 8.84B | 11.53B | 930.00M |
Balance Sheet | ||||||
| Total Assets | 62.14B | 57.99B | 60.14B | 63.06B | 60.98B | 57.89B |
| Cash, Cash Equivalents and Short-Term Investments | 5.73B | 4.69B | 4.66B | 5.42B | 4.86B | 4.12B |
| Total Debt | 11.49B | 11.70B | 11.54B | 12.64B | 12.72B | 15.13B |
| Total Liabilities | 35.21B | 31.38B | 32.62B | 34.53B | 35.51B | 38.07B |
| Stockholders Equity | 23.87B | 23.73B | 24.51B | 26.35B | 23.56B | 18.43B |
Cash Flow | ||||||
| Free Cash Flow | 5.93B | 5.03B | 5.78B | 8.32B | 10.89B | 4.19B |
| Operating Cash Flow | 6.26B | 5.83B | 6.68B | 9.23B | 12.57B | 5.86B |
| Investing Cash Flow | -1.61B | -1.84B | -1.98B | -1.86B | -2.81B | -2.16B |
| Financing Cash Flow | -3.68B | -4.18B | -5.05B | -6.94B | -8.85B | -2.85B |
Valero Energy Technical Analysis
Negative
223.65
Price Trends
224.36
Negative
199.88
Positive
177.15
Positive
Market Momentum
2.36
Positive
42.47
Neutral
29.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLO, the sentiment is Negative. The current price of 223.65 is below the 20-day moving average (MA) of 241.38, below the 50-day MA of 224.36, and above the 200-day MA of 177.15, indicating a neutral trend. The MACD of 2.36 indicates Positive momentum. The RSI at 42.47 is Neutral, neither overbought nor oversold. The STOCH value of 29.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $12.12B | 4.35 | 6.25% | 4.26% | -1.08% | ― | |
67 Neutral | $75.51B | 14.57 | 9.88% | 2.74% | -2.53% | 385.02% | |
66 Neutral | $73.12B | 12.26 | 24.01% | 2.24% | -4.31% | 34.12% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
62 Neutral | $71.83B | 88.46 | 14.72% | 3.68% | -1.33% | 130.72% | |
61 Neutral | $2.86B | -3.37 | -25.85% | 3.42% | -6.49% | 93.38% | |
51 Neutral | $5.09B | 7.04 | -3.05% | 4.14% | -4.33% | ― |
* Energy Sector Average
VLO
Valero Energy
246.87
131.34
113.68%
DK
Delek US Holdings
46.73
33.58
255.36%
DINO
HF Sinclair Corporation
69.17
38.52
125.65%
MPC
Marathon Petroleum
246.15
107.57
77.63%
PSX
Phillips 66
176.19
72.84
70.47%
PBF
PBF Energy
43.00
26.15
155.15%
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.