Valero Energy’s Price Target Raised at UBS

TD Cowen downgraded Valero Energy (NYSE:VLO) from Buy to Hold, raising its price target from $118 to $140 but warning that the stock now reflects much of the sector’s recent bullishness, leaving limited room for further gains.

Valero shares have risen 19% year-to-date, closely tracking the broader refining sector. Since early 2024, the stock is up 12%, and since 2022, it has surged 90%, making it one of the top performers in its peer group.

TD Cowen estimates the stock is currently pricing in about $7.30 per barrel in EBITDA—a level near historical highs, excluding the extreme earnings seen during the Russia-Ukraine conflict in 2022–2023. The firm sees valuations as stretched, with limited underlying earnings growth to justify additional upside at this point.

Valero remains a strong free cash flow generator, and share buybacks—potentially as high as 15 million shares annually—could support FCF per share over time. However, TD Cowen notes that investors typically focus on near-term refining dynamics, and with much of the optimism already priced in, the stock could be set for stabilization or downside from here.

Valero Energy Corporation, listed as NYSE:VLO, is a prominent player in the energy sector, primarily engaged in refining and marketing petroleum products. As the company prepares to release its quarterly earnings on April 24, 2025, analysts are keenly observing the expected earnings per share (EPS) of $0.43 and projected revenue of approximately $28.46 billion.

The anticipated EPS of $0.43 represents a significant 88.7% decline from the same period last year, as highlighted by Wall Street analysts. This decline is noteworthy, especially considering the 10.4% year-over-year decrease in revenue to $28.45 billion. Despite these declines, there has been an 8.3% upward revision in the consensus EPS estimate over the past 30 days, indicating a shift in analysts' expectations.

Valero's financial metrics provide further insight into its market position. The company's price-to-earnings (P/E) ratio of 13.07 suggests a moderate market valuation of its earnings. Meanwhile, the price-to-sales ratio of 0.27 indicates a relatively low market valuation compared to its revenue. The enterprise value to sales ratio of 0.33 shows that Valero's enterprise value is slightly higher than its sales.

The company's financial health is also reflected in its debt-to-equity ratio of 0.47, indicating a moderate level of debt compared to equity. Additionally, Valero's current ratio of 1.53 suggests a good level of short-term liquidity to cover its liabilities. These metrics, combined with an earnings yield of 7.65%, provide a comprehensive view of Valero's financial standing.

As Valero prepares to release its earnings, the market will closely watch for any deviations from the expected figures. The management's discussion during the earnings call will be crucial in understanding the sustainability of any immediate price changes and future earnings expectations. Investors will be particularly interested in how Valero navigates the challenges of declining earnings and revenue.

Valero Energy Corporation, listed as NYSE:VLO, is a prominent player in the energy sector, primarily engaged in refining and marketing petroleum products. As the company prepares to release its quarterly earnings on April 24, 2025, analysts are keenly observing the expected earnings per share (EPS) of $0.43 and projected revenue of approximately $28.46 billion.

The anticipated EPS of $0.43 represents a significant 88.7% decline from the same period last year, as highlighted by Wall Street analysts. This decline is noteworthy, especially considering the 10.4% year-over-year decrease in revenue to $28.45 billion. Despite these declines, there has been an 8.3% upward revision in the consensus EPS estimate over the past 30 days, indicating a shift in analysts' expectations.

Valero's financial metrics provide further insight into its market position. The company's price-to-earnings (P/E) ratio of 13.07 suggests a moderate market valuation of its earnings. Meanwhile, the price-to-sales ratio of 0.27 indicates a relatively low market valuation compared to its revenue. The enterprise value to sales ratio of 0.33 shows that Valero's enterprise value is slightly higher than its sales.

The company's financial health is also reflected in its debt-to-equity ratio of 0.47, indicating a moderate level of debt compared to equity. Additionally, Valero's current ratio of 1.53 suggests a good level of short-term liquidity to cover its liabilities. These metrics, combined with an earnings yield of 7.65%, provide a comprehensive view of Valero's financial standing.

As Valero prepares to release its earnings, the market will closely watch for any deviations from the expected figures. The management's discussion during the earnings call will be crucial in understanding the sustainability of any immediate price changes and future earnings expectations. Investors will be particularly interested in how Valero navigates the challenges of declining earnings and revenue.

Valero Energy Corporation (NYSE:VLO) reported its Q2 results, with EPS of $11.36 coming in better than the consensus estimate of $9.14. Revenue was $51.64 billion, compared to the consensus estimate of $40.73 billion.

As expected, the refining segment posted a strong quarter given the elevated crack environment and high utilization of 94% during Q2, which resulted in significant cash generation. Refining margins in the quarter were supported by strong product demand and low inventories. Additionally, US refineries continue to have cost advantages over global competitors given differences in energy costs.

According to the analysts at RBC Capital, the big EPS beat (which is allowing continued balance sheet improvements and a materially higher pace of stock buybacks), coupled with a potentially higher structural mid cycle provide support and upside to the company’s valuation.

The analysts raised their price target to $143 from $141, while maintaining their outperform rating.

Valero Energy Corporation (NYSE:VLO) reported its Q2 results, with EPS of $11.36 coming in better than the consensus estimate of $9.14. Revenue was $51.64 billion, compared to the consensus estimate of $40.73 billion.

As expected, the refining segment posted a strong quarter given the elevated crack environment and high utilization of 94% during Q2, which resulted in significant cash generation. Refining margins in the quarter were supported by strong product demand and low inventories. Additionally, US refineries continue to have cost advantages over global competitors given differences in energy costs.

According to the analysts at RBC Capital, the big EPS beat (which is allowing continued balance sheet improvements and a materially higher pace of stock buybacks), coupled with a potentially higher structural mid cycle provide support and upside to the company’s valuation.

The analysts raised their price target to $143 from $141, while maintaining their outperform rating.

Analysts at RBC Capital provided their views on Valero Energy Corporation (NYSE:VLO), increasing their Q1 estimates, despite the fact that refining cracks continue to surge. The company’s refining margin indicator jumped to the $16/bbl range, up $4/bbl from prior quarter levels and more than double year-ago levels. Notably, March levels are above $20/bbl.

Given flat-price and derivative product volatility, the analysts do expect some pressure on capture in Q1 but increase their Q1 EPS to $1.58 from $0.76.

The analysts believe the company holds the best refining assets in the group, which keeps them constructive amid the current backdrop. Their price target was increased to $108 from $98, while their outperform rating was maintained.