Group 1 - The investor has experienced multiple market crashes, including those in 1987, 2000, and 2008, indicating a long-term perspective on market volatility [1] - The investor utilizes trading systems developed with TradeStation, suggesting a reliance on technology for trading strategies [1] - Professional background includes several decades as a process control engineer, which may contribute to analytical skills in investment [1] Group 2 - There is no disclosure of stock, option, or similar derivative positions in any mentioned companies, indicating a neutral stance on potential conflicts of interest [2] - The article expresses personal opinions of the author without compensation from companies mentioned, reinforcing the independence of the analysis [2] - Seeking Alpha clarifies that past performance does not guarantee future results, emphasizing the importance of independent research [3]

Company Performance - Valero Energy (VLO) closed at $133.84, with a +1.37% change from the previous day, outperforming the S&P 500's gain of 1.08% [1] - Over the past month, VLO shares have depreciated by 4.46%, underperforming the Oils-Energy sector's loss of 2.69% and outperforming the S&P 500's loss of 8.26% [1] Earnings Forecast - Valero Energy is expected to report earnings on April 24, 2025, with a forecasted EPS of $0.83, reflecting a 78.27% decrease from the same quarter last year [2] - The Zacks Consensus Estimate for revenue is projected at $28.56 billion, down 10.08% from the previous year [2] - For the full year, analysts expect earnings of $7.73 per share and revenue of $118.41 billion, indicating changes of -8.84% and -8.83% respectively from last year [3] Analyst Estimates - Recent changes to analyst estimates for Valero Energy indicate a correlation with near-term business trends, with upward revisions suggesting analysts' positivity towards the company's operations [4] - The Zacks Rank system, which reflects these estimate changes, currently ranks Valero Energy at 3 (Hold) after a 2.32% downward shift in the EPS estimate over the past month [6] Valuation Metrics - Valero Energy is trading at a Forward P/E ratio of 17.07, which is a premium compared to the industry's average Forward P/E of 16.89 [7] - The company has a PEG ratio of 2.85, aligning with the average PEG ratio of the Oil and Gas - Refining and Marketing industry [7] Industry Overview - The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector and holds a Zacks Industry Rank of 73, placing it in the top 30% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Group 1: Company Performance - Valero Energy Corporation and Marathon Petroleum Corp have seen their shares drop nearly 20% over the past month due to a sell-off in oil [1] - Both companies may be on the verge of a reversal and rally, making them notable investment opportunities [1] Group 2: Technical Analysis Insights - Technical analysis can be better understood through the lens of psychology, as it reflects the behavior of traders and investors [2] - Patterns such as double tops and triple tops indicate potential reversals, with double tops suggesting a stock may head lower after two peaks [2][4] - Conversely, double bottoms indicate a potential upward reversal, suggesting that stocks may find support at previous low price levels [4] Group 3: Market Dynamics - The presence of regretful sellers can create resistance at previous peak prices, as they look to exit their positions without incurring losses [3][5] - Support can form at former support levels due to buyers wanting to repurchase shares at the price they previously sold [5] - Stocks often rally off support levels, which can lead to aggressive buying and a potential snowball effect driving prices higher [6]

Company Performance - Valero Energy (VLO) ended the recent trading session at $130.73, showing a +0.85% change from the previous day's closing price, which lagged behind the S&P 500's gain of 1.59% [1] - Over the last month, Valero's shares have decreased by 4.28%, underperforming the Oils-Energy sector's loss of 2.21% and the S&P 500's loss of 2.42% [1] Earnings Forecast - Valero Energy is expected to report an EPS of $0.72, reflecting an 81.15% decrease from the same quarter last year, with a revenue forecast of $28.75 billion, indicating a 9.48% decline year-over-year [2] - Full-year Zacks Consensus Estimates predict earnings of $7.97 per share and revenue of $118.57 billion, representing year-over-year changes of -6.01% and -8.71%, respectively [3] Analyst Projections - Recent shifts in analyst projections for Valero Energy should be monitored, as positive estimate revisions can indicate optimism about the company's business outlook [4] - The Zacks Rank system, which incorporates estimate changes, currently ranks Valero Energy at 3 (Hold), with the consensus EPS estimate moving 3.85% lower over the past month [6] Valuation Metrics - Valero Energy has a Forward P/E ratio of 16.27, which aligns with the industry's average Forward P/E of 16.27 [7] - The company also has a PEG ratio of 2.71, consistent with the average PEG ratio of the Oil and Gas - Refining and Marketing industry [8] Industry Context - The Oil and Gas - Refining and Marketing industry, part of the Oils-Energy sector, holds a Zacks Industry Rank of 160, placing it in the bottom 37% of over 250 industries [9]

Capital Investments and Production Capacity - The company has made capital investments of $4.0 billion in its renewable diesel business and $1.8 billion in its ethanol business, with renewable diesel representing 100% of the capital investments made by DGD[33]. - The company operates 15 petroleum refineries with a combined feedstock throughput capacity of approximately 3.2 million barrels per day (BPD)[37]. - DGD's St. Charles Plant has a production capacity of approximately 700 million gallons of renewable diesel and 30 million gallons of renewable naphtha per year, while the Port Arthur Plant has a capacity of 470 million gallons of renewable diesel and 20 million gallons of renewable naphtha, totaling approximately 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha combined annually[56]. - The ethanol business has grown to 12 plants with a combined production capacity of approximately 1.7 billion gallons of ethanol per year, processing corn to produce various co-products[59]. - DGD's ethanol plants have a combined annual corn processing capacity of 583 million bushels[61]. Renewable Diesel and SAF Production - The DGD renewable diesel plants began producing neat SAF in Q4 2024, which can be blended up to 50% with conventional jet fuel[54]. - The company’s renewable diesel segment includes operations to market renewable diesel, renewable naphtha, and neat SAF[34]. - DGD expects to distribute neat SAF internationally by ship and barge starting in 2025, expanding its market reach[58]. - The SAF project at the Port Arthur Plant will allow for the upgrade of approximately 50% of its renewable diesel production capacity to neat SAF, enhancing product offerings[57]. Financial Performance - Valero Energy Corporation reported revenues of $129.881 billion for the year ended December 31, 2024, a decrease of 10.3% compared to $144.766 billion in 2023[297]. - The net income attributable to Valero Energy Corporation stockholders for 2024 was $2.770 billion, down 68.7% from $8.835 billion in 2023[297]. - The company's total assets decreased to $60.143 billion as of December 31, 2024, from $63.056 billion in 2023, reflecting a decline of 4.8%[295]. - Valero's operating income for 2024 was $3.755 billion, a significant drop of 68.3% compared to $11.858 billion in 2023[297]. - The company's cash and cash equivalents decreased to $4.657 billion in 2024 from $5.424 billion in 2023, a decline of 14.1%[295]. - Valero's earnings per common share for 2024 were $8.58, down 65.5% from $24.93 in 2023[297]. - Comprehensive income attributable to Valero Energy Corporation stockholders for 2024 was $2,368 million, down from $9,324 million in 2023, reflecting a decline of 74.7%[299]. Operational Risks and Challenges - Financial results are affected by volatile margins dependent on feedstock prices and market conditions, with historical volatility expected to continue[84]. - A significant portion of profitability is derived from purchasing crude oil feedstocks that have historically been cheaper than benchmark crude oils, with declines in differentials negatively impacting operations[85]. - Demand for products may decrease due to factors such as increased fuel efficiency, consumer transition to alternative fuel vehicles, and competition from new entrants in the low-carbon fuels industry[86]. - Climate-related advocacy has led to increased pressure on fossil fuel companies, potentially impacting operating costs and capital allocation decisions[87]. - The company faces risks related to the costs and availability of natural gas and electricity, which are critical for operations and can be affected by various external factors[91]. - Supply chain risks exist due to reliance on global suppliers for feedstocks and critical supplies, with geopolitical tensions potentially disrupting trade flows[93]. - Increased competition for feedstocks in the renewable diesel market may require sourcing from international suppliers, heightening exposure to geopolitical and regulatory risks[94]. - The company actively manages risks through contracting and hedging, but price volatility and supply disruptions could materially affect financial condition and operations[92]. Regulatory and Compliance Issues - The company is subject to evolving methodologies and standards for tracking GHG emissions, which may impact disclosures and reputational standing[90]. - The company is subject to extensive environmental, health, and safety laws, which have become more complex and stringent, leading to increased compliance costs and potential liabilities[119]. - Legal and regulatory developments regarding climate-related matters could reduce demand for petroleum-based products, impacting the company's operations[106]. - Global government actions, including taxes and penalties on fossil fuel companies, could increase costs and limit profitability for the company[112]. - The EPA announced final rules in June 2023 that increase Renewable Volume Obligations (RVOs) for 2023, 2024, and 2025, which could affect the company's compliance costs and operational strategies[115]. - The California Air Resources Board (CARB) approved updates in November 2024 aiming for a 30% reduction in the Carbon Intensity (CI) of California's transportation fuel pool by 2030 and 90% by 2045, influencing the company's low-carbon fuel strategy[115]. Employee and Safety Management - The company has a total of 9,922 employees as of December 31, 2024, with 8,273 located in the U.S.[66]. - The refinery employee total recordable incident rate (TRIR) for 2024 was 0.16, indicating a focus on safety and operational reliability[73]. - The company emphasizes a culture of safety and accountability, with training programs aimed at improving employee performance and operational excellence[71]. - The company’s operations may be negatively impacted by labor-related issues, including strikes and the inability to attract sufficient labor, leading to increased costs[133]. Debt and Financial Management - As of December 31, 2024, the company's fixed-rate debt totals $8,098 million with an average interest rate of 4.9%[268]. - The company has significant exposure to market risks related to commodity price volatility, particularly in crude oil and natural gas, and utilizes derivative instruments to manage this risk[263]. - The company has a total of $58 million in floating-rate debt with an average interest rate of 8.4% as of December 31, 2024[268]. - The company has implemented internal controls over financial reporting, which were deemed effective as of December 31, 2024[272]. Environmental and Climate Risks - The company faces risks from climate-related litigation and regulatory actions, which could result in substantial legal costs and reputational damage[121]. - The company has incurred costs associated with severe weather events, which could materially affect operations and assets if such events become more frequent or intense[132]. - Cybersecurity threats pose risks to the company's information systems, potentially leading to increased costs and operational disruptions[127]. - The company is exposed to increased legal and regulatory focus on data privacy and security, which may lead to higher operational costs and liabilities[129].

Core Viewpoint - Valero Energy Corporation (VLO) reported better-than-expected fourth-quarter 2024 results, with both earnings and revenues surpassing the Zacks Consensus Estimate, despite a subsequent 2.3% decline in stock price following the earnings release on January 30 [1]. Valero's Refining Business - Valero operates 15 refineries across the United States, Canada, and the United Kingdom, with a combined throughput capacity of 3.2 million barrels per day [2]. Better-Than-Expected Q4 Results - The company reported adjusted earnings of 64 cents per share, exceeding the Zacks Consensus Estimate of 13 cents, although this was a decrease from $3.57 in the same quarter last year [3]. - Revenues fell to $30.76 billion from $35.41 billion year-over-year, but still beat the Zacks Consensus Estimate of $30.73 billion [4]. Operational Performance - Adjusted operating income in the Refining segment was $441 million, down from $1.6 billion in the prior-year quarter, primarily due to significantly lower refining margins [5]. - Valero processed a record volume of heavy sour crude, showcasing the flexibility of its refining system despite lower margins [5]. Future Outlook - The company anticipates that refining margins will be supported by low light product inventories as the driving season approaches [6]. - Valero is also working on an FCC Unit Optimization project at St. Charles to enhance high-value product yields, including high-octane alkylate [6]. Throughput Volumes & Margins - In Q4, Valero's refining throughput volumes were 2,995 thousand barrels per day, consistent with the previous year's figure, and above the estimate of 2,688 MBbls/d [7]. - The refining margin per barrel of throughput decreased to $8.44 from $12.89 year-over-year, while the estimate was $10.8 [8]. Performance of Big Energy Players - Other major energy companies, including Exxon Mobil Corporation, Chevron Corporation, and SLB, have also reported fourth-quarter earnings, with ExxonMobil and SLB beating the Zacks Consensus Estimate, while Chevron missed [9].

Core Viewpoint - Valero Energy (VLO) has seen significant interest, with a recent stock performance of +12.3% over the past month, outperforming the S&P 500's +2.1% and the Oil and Gas - Refining and Marketing industry's +5.8% [1] Earnings Estimates - Valero Energy is expected to report earnings of $0.77 per share for the current quarter, reflecting a year-over-year decline of -79.8%, with a consensus estimate change of -16.9% over the last 30 days [4] - The consensus earnings estimate for the current fiscal year is $7.86, indicating a year-over-year change of -7.3%, with a -9.3% change in estimates over the last month [4] - For the next fiscal year, the consensus earnings estimate is $10.63, representing a +35.2% change from the previous year, with a slight increase of +1.1% in the last month [5] Revenue Projections - The consensus sales estimate for the current quarter is $28.42 billion, indicating a year-over-year decline of -10.5% [8] - For the current fiscal year, the revenue estimate is $119.93 billion, reflecting a -7.7% change, while the next fiscal year's estimate is $122.35 billion, indicating a +2% change [8] Recent Performance - In the last reported quarter, Valero Energy generated revenues of $30.76 billion, a year-over-year decrease of -13.2%, with an EPS of $0.64 compared to $3.55 a year ago [9] - The reported revenues exceeded the Zacks Consensus Estimate of $30.73 billion by +0.09%, and the EPS surprise was +392.31% [10] - Over the last four quarters, Valero Energy surpassed consensus EPS estimates three times and revenue estimates two times [10] Valuation Metrics - Valero Energy is rated A in the Zacks Value Style Score, indicating it is trading at a discount compared to its peers [14] - The evaluation of valuation multiples such as P/E, P/S, and P/CF is essential to determine if the stock is fairly valued, overvalued, or undervalued [12][13] Overall Outlook - The Zacks Rank 3 suggests that Valero Energy may perform in line with the broader market in the near term, despite the market buzz surrounding the company [15]

Group 1 - Valero Energy reported earnings of $0.64 per share, significantly exceeding expectations of $0.06 per share [1] - Earnings decreased from $1.14 per share in the previous quarter, but the earnings beat demonstrates the company's strong cost structure [1] Group 2 - The article emphasizes the long-term investment potential of equities in the energy sector, particularly focusing on income-producing assets [1]

Core Insights - Valero Energy Corporation (VLO) reported fourth-quarter 2024 adjusted earnings of 88 cents per share, exceeding the Zacks Consensus Estimate of 13 cents, but down from $3.55 in the same quarter last year [1] - Total quarterly revenues decreased to $30,756 million from $35,414 million year-over-year, although it surpassed the Zacks Consensus Estimate of $30,729 million [1] Revenue and Earnings Performance - The better-than-expected quarterly results were primarily driven by increased renewable diesel margins and lower total cost of sales, although these positives were partially offset by a decline in refining margins [2] - Total cost of sales decreased to $30,127 million from $33,540 million in the prior-year quarter, also below the estimate of $30,590.1 million, mainly due to a reduction in the cost of materials [9] Segmental Performance - Adjusted operating income in the Refining segment was $437 million, down from $1,577 million year-over-year, and missed the estimate of $1,296.5 million, impacted by significantly lower refining margins [3] - In the Ethanol segment, adjusted operating profit was $20 million, down from $205 million in the prior-year quarter, missing the estimate of $84.2 million due to a drop in ethanol margins [4] - The Renewable Diesel segment reported an operating income of $170 million, up from $84 million year-over-year, benefiting from higher renewable diesel margins despite a decline in sales volume to 3,356 thousand gallons per day from 3,773 thousand gallons [5] Throughput Volumes and Margins - Refining throughput volumes totaled 2,995 thousand barrels per day, consistent with the year-ago figure and above the estimate of 2,688 thousand barrels per day [6] - The refining margin per barrel of throughput decreased to $8.44 from $12.89 year-over-year, while refining operating expenses per barrel were $4.67 compared to $4.99 in the prior-year quarter [8] Capital Investment and Balance Sheet - Capital investment for the fourth quarter totaled $547 million, with $452 million allocated for sustaining the business [11] - At the end of the fourth quarter, the company had cash and cash equivalents of $4.7 billion, total debt of $8.1 billion, and finance lease obligations of $2.4 billion [11]

Core Insights - Valero Energy (VLO) reported quarterly earnings of $0.64 per share, significantly exceeding the Zacks Consensus Estimate of $0.13 per share, but down from $3.55 per share a year ago, indicating an earnings surprise of 392.31% [1] - The company achieved revenues of $30.76 billion for the quarter ended December 2024, slightly surpassing the Zacks Consensus Estimate by 0.09%, but down from $35.41 billion year-over-year [2] - Valero Energy's stock has increased by approximately 13.8% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] Earnings Outlook - The future performance of Valero Energy's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - Current consensus EPS estimate for the upcoming quarter is $0.96 on revenues of $29.11 billion, and for the current fiscal year, it is $8.29 on revenues of $121.74 billion [7] Industry Context - The Oil and Gas - Refining and Marketing industry, to which Valero Energy belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, Delek US Holdings, is expected to report a significant loss, indicating potential challenges within the sector [9]