Valero Energy (VLO) AI Stock Analysis

• Market Cap: $42.32B
• Dividend Yield: 3.21%
• Average Volume (3M): 3.89M
• Price to Earnings (P/E): 47.6
• Beta (1Y): 0.99
• Revenue Growth: -8.44%
• EPS Growth: -85.95%
• Country: US
• Employees: 9,898
• Sector: Energy
• Sector Strength: 54
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 0.89
• Shares Outstanding: 313,206,120
• 10 Day Avg. Volume: 3,276,372
• 30 Day Avg. Volume: 3,893,902
• PEG Ratio: -0.62
• Price to Book (P/B): 1.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.36
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 0.08
• Enterprise Value/Gross Profit: 13.61
• Enterprise Value/Ebitda: 1.46
• 1Y Price Target: $144.13
• Price Target Upside: 7.30% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16

Valero Energy's overall score reflects a mix of strengths and challenges. The company's strong financial performance, particularly in cash flow management, is a key strength. Technical analysis shows mixed signals, while valuation appears high. The recent earnings call highlighted significant challenges, including a net loss and regulatory issues, which weigh on the score. Despite these challenges, Valero's commitment to shareholder returns and operational improvements provide some positive outlook.

Positive Factors

Geographical Advantage

Strong presence in advantaged US Gulf Coast and mid-continent, allowing for flexible sourcing and quick product yield optimization.

Green Fuel Initiatives

Green fuel is a key driver going forward with renewable diesel and SAF expected to boost financial performance.

Shareholder Returns

The company has a relatively healthy balance sheet and strong cash flow generation, which supports continued commitment to shareholder returns.

Negative Factors

Demand and Economic Activity

Slow demand to pressure 2025F, hit by slower-than-expected global economic activities.

Refinery Closure Impact

Valero Energy announced the closure of its Benicia refinery, which may affect its operations in Northern California.

Tariff Concerns

Tariff concerns weigh on the outlook for Valero Energy Corporation.

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, Renewable Diesel, and Ethanol. It produces conventional, premium, and reformulated gasolines; gasoline meeting the specifications of the California Air Resources Board (CARB); diesel fuels, and low-sulfur and ultra-low-sulfur diesel fuels; CARB diesel; other distillates; jet fuels; blendstocks; and asphalts, petrochemicals, lubricants, and other refined petroleum products, as well as sells lube oils and natural gas liquids. As of December 31, 2021, the company owned 15 petroleum refineries with a combined throughput capacity of approximately 3.2 million barrels per day; and 12 ethanol plants with a combined ethanol production capacity of approximately 1.6 billion gallons per year. It sells its refined products through wholesale rack and bulk markets; and through approximately 7,000 outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brands. The company also produces and sells ethanol, dry distiller grains, syrup, and inedible corn oil primarily to animal feed customers. In addition, it owns and operates crude oil and refined petroleum products pipelines, terminals, tanks, marine docks, truck rack bays, and other logistics assets; and owns and operates a plant that processes animal fats, used cooking oils, and inedible distillers corn oils into renewable diesel. The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1980 and is headquartered in San Antonio, Texas.

How the Company Makes Money

Valero Energy makes money primarily through its refining and marketing operations. The company's revenue is largely derived from refining crude oil into various petroleum products, which are then sold through wholesale and retail channels. Key revenue streams include the sale of gasoline, diesel, and jet fuel, as well as petrochemical feedstocks and other refined products. Valero also generates income from ethanol production and wholesale marketing operations. Strategic partnerships and supply agreements with retailers and distributors enhance its market reach, while its extensive logistics network supports efficient distribution. Factors such as crude oil prices, refining margins, and demand for refined products significantly impact Valero's earnings.

Valero Energy Financial Statement Overview

Summary

Valero Energy demonstrates a commendable financial position, characterized by stable profitability, prudent leverage, and strong cash flow management. Despite facing industry-wide challenges, the company has maintained positive operational metrics and strengthened its balance sheet. However, the decline in revenue and return on equity signals areas for improvement. Overall, Valero is well-positioned to navigate market fluctuations and leverage its strong cash flow for continued growth.

Income Statement

Valero Energy shows resilience in its income statement. The TTM data reveal a gross profit margin of 2.47% and a net profit margin of 0.72%, indicating modest profitability. Although revenue declined slightly from the previous year, the company has maintained positive EBIT and EBITDA margins, showcasing operational efficiency in a challenging market. The revenue growth rate is negative due to market conditions, but the company remains profitable.

Balance Sheet

Valero's balance sheet is strong, with a debt-to-equity ratio of 0.46, indicating prudent leverage levels. The equity ratio stands at 39.70%, reflecting solid capitalization. However, the return on equity has decreased to 3.96% in the TTM, suggesting reduced profitability compared to previous years. The company maintains healthy liquidity, but overall asset growth has slowed.

Cash Flow

Valero's cash flow statement is robust, with a free cash flow of $4.86 billion in the TTM, showing a strong recovery from past volatility. The operating cash flow to net income ratio of 6.22 indicates efficient cash generation relative to earnings. Although capital expenditures have increased, the company effectively manages its cash flows, ensuring financial stability and operational flexibility.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
128.38B	129.88B	144.77B	176.38B	113.98B	64.91B
	Gross Profit
3.29B	4.76B	12.90B	16.75B	3.08B	-788.00M
	EBIT
1.18B	3.75B	11.86B	15.69B	2.13B	-1.58B
	EBITDA
4.42B	7.03B	14.66B	18.34B	4.55B	904.00M
	Net Income Common Stockholders
930.00M	2.77B	8.84B	11.53B	1.29B	-1.11B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.63B	4.66B	5.42B	4.86B	4.12B	3.31B
	Total Assets
59.18B	60.14B	63.06B	60.98B	57.89B	51.77B
	Total Debt
10.85B	11.54B	12.64B	3.57B	1.92B	15.85B
	Net Debt
6.22B	6.88B	7.21B	-1.30B	-2.20B	12.53B
	Total Liabilities
32.86B	32.62B	34.53B	35.51B	38.07B	32.13B
	Stockholders Equity
23.49B	24.51B	26.35B	23.56B	18.43B	18.80B
Cash Flow		Free Cash Flow
4.61B	5.78B	8.32B	-1.02B	-1.23B	-770.00M
	Operating Cash Flow
5.79B	6.68B	9.23B	661.00M	439.00M	1.02B
	Investing Cash Flow
-1.98B	-1.98B	-1.86B	-2.81B	-2.16B	-2.42B
	Financing Cash Flow
-3.79B	-5.05B	-6.94B	-8.85B	-2.85B	2.08B

Valero Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 134.32
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLO, the sentiment is Positive. The current price of 134.32 is above the 20-day moving average (MA) of 117.91, above the 50-day MA of 121.50, and above the 200-day MA of 131.66, indicating a bullish trend. The MACD of 3.06 indicates Negative momentum. The RSI at 69.82 is Neutral, neither overbought nor oversold. The STOCH value of 91.75 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VLO.

Valero Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SUN	74 Outperform	$8.48B	9.98	26.11%	6.11%	-3.59%	22.77%
DINO	72 Outperform	$6.92B	35.13	-1.49%	5.45%	-11.17%	-109.60%
PSX	71 Outperform	$51.16B	28.64	6.48%	3.66%	-7.61%	-66.18%
MPC	69 Neutral	$50.03B	22.88	12.37%	2.13%	-6.39%	-64.50%
VLO	68 Neutral	$42.32B	47.64	3.73%	3.21%	-8.44%	-85.95%
Sector *	56 Neutral	$7.27B	3.51	-4.45%	5.66%	0.09%	-52.20%
PBF	55 Neutral	$2.65B	―	-18.01%	4.58%	-16.30%	-160.78%

Valero Energy Corporate Events

Valero Energy Holds Annual Stockholders’ Meeting

On May 6, 2025, Valero Energy Corporation held its annual stockholders’ meeting where director Robert A. Profusek retired in line with the company’s retirement policy. During the meeting, all director nominees were successfully elected to serve until the 2026 annual meeting, and key proposals, including executive compensation and the appointment of KPMG LLP as the independent accounting firm, were approved. Additionally, Valero entered into a Stock Unit Award Agreement with its re-elected non-employee directors, granting stock units valued at $200,000 each, which will vest at the 2026 annual meeting, reflecting the company’s commitment to aligning director compensation with shareholder interests.

Spark’s Take on VLO Stock

According to Spark, TipRanks’ AI Analyst, VLO is a Neutral.

Valero Energy’s overall stock score reflects its solid financial performance and strong cash flow management, which are offset by technical analysis indicators suggesting potential downside risks and a high P/E ratio indicating possible overvaluation. The earnings call highlighted both strengths in shareholder returns and progress on projects, as well as challenges from asset impairments and regulatory issues. While the company shows resilience, the financial setbacks and market conditions present significant challenges.

To see Spark’s full report on VLO stock, click here.