In a report released today, Jason Gabelman from TD Cowen maintained a Hold rating on Valero Energy, with a price target of $165.00.
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Jason Gabelman has given his Hold rating due to a combination of factors impacting Valero Energy’s stock. The recent geopolitical events, such as US sanctions against Russia and attacks on Russian refineries, have created macroeconomic tailwinds that benefited Valero. However, the market has historically found ways to navigate such sanctions, and it is expected that this pattern will continue, albeit with some delay.
Despite the positive near-term earnings outlook, driven by disruptions in Russian product flows and strong refining margins, there are uncertainties regarding the sustainability of these conditions. The stock is currently trading above its historical EBITDA multiple, and while the company remains optimistic about widening light/heavy spreads, there are variables such as Russian sanctions that could influence these spreads. Therefore, while the immediate financial performance is strong, the longer-term outlook remains uncertain, justifying the Hold rating.
In another report released on October 16, Citi also maintained a Hold rating on the stock with a $162.00 price target.