Valero upgraded to Buy at BofA, sees U.S. refiners re-rating higher

As previously reported, BofA upgraded Valero to Buy from Neutral with a price target of $210, up from $156. When considering a sustainable increase in mid-cycle earnings, the firm believes conditions are in place for another step up in absolute valuations for U.S. refiners and it has raised its price targets in the group by 25% on average, the analyst tells investors. With the U.S. refining system entering its third seasonal cycle post-COVID, the firm sees several repeating factors that lead it to view the magnitude of what constitutes a higher, sustainable mid-cycle when compared to a 10-year view, adding that at the time of this note 2024 is “headed for another above mid-cycle year.”