Core Viewpoint - Valero Energy is experiencing a decline in stock performance, with a significant upcoming earnings report expected to show substantial year-over-year growth in earnings per share, despite a projected decline in revenue [2][3]. Group 1: Stock Performance - Valero Energy's stock closed at $162.82, reflecting a -3.03% change from the previous day's closing price, underperforming compared to the S&P 500's loss of 0.24% [1]. - Over the past month, Valero's shares have decreased by 5.89%, which is worse than the Oils-Energy sector's loss of 1.72% and the S&P 500's gain of 1.31% [1]. Group 2: Upcoming Earnings Report - Valero Energy is set to announce its earnings on January 29, 2026, with an expected earnings per share of $3.22, indicating a year-over-year growth of 403.13% [2]. - The consensus estimate for revenue is projected at $29.13 billion, representing a 5.28% decline compared to the same quarter last year [2]. Group 3: Annual Forecasts - For the entire year, the Zacks Consensus Estimates predict earnings of $10.07 per share and revenue of $121.45 billion, reflecting changes of +18.75% and -6.49%, respectively, from the previous year [3]. - Recent analyst estimate revisions suggest a positive outlook for Valero Energy's business and profitability [3][4]. Group 4: Valuation Metrics - Valero Energy currently has a Forward P/E ratio of 16.67, which is higher than the industry average of 14.05, indicating that it is trading at a premium [6]. - The company has a PEG ratio of 1.19, aligning with the industry average, which suggests that the stock's expected earnings growth rate is factored into its valuation [7]. Group 5: Industry Ranking - The Oil and Gas - Refining and Marketing industry, which includes Valero Energy, holds a Zacks Industry Rank of 85, placing it in the top 35% of over 250 industries [7][8]. - The Zacks Industry Rank indicates that the top-rated industries tend to outperform the lower-rated ones by a factor of 2 to 1 [8].

Core Viewpoint - Valero Energy's shares declined over 2% after Mizuho downgraded the company from Outperform to Neutral, setting a new price target of $192, citing concerns over valuation and refining margins [1][3] Company Summary - Mizuho highlighted Valero's above-peer valuation and the potential for weaker refining margins as primary reasons for the downgrade [1] - Despite the downgrade, Mizuho maintained a positive outlook on Valero's execution, integrated refining assets, and disciplined capital return strategy [1] - The refining outlook for 2026 appears less favorable, impacting Valero's stock performance [1][2] Industry Summary - Several global refining projects expected to launch by 2025 have been delayed to the first half of 2026, which may affect supply-demand dynamics and pressure refining margins [2] - Valero has shown strong year-to-date performance among large-cap refiners, but its significant exposure to the refining cycle could make it vulnerable to a softer macroeconomic environment [2]

About Valero Valero Energy Corporation, through its subsidiaries (collectively, Valero), is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products, and sells its products primarily in the United States (U.S.), Canada, the United Kingdom (U.K.), Ireland, and Latin America. Valero owns 15 petroleum refineries located in the U.S., Canada, and the U.K. with a combined throughput capacity of approximately 3.2 million barrels per day. Val ...

Core Insights - Valero Energy (VLO) shares have increased nearly 30% over the past year, indicating strong performance in the market [1] - The company has experienced a significant recovery in the refining macro environment following a challenging summer [1] Company Performance - Valero Energy's stock performance reflects a material recovery in the refining sector, which has positively impacted its financial standing [1] Market Environment - The refining macro environment has shown signs of recovery, contributing to Valero's stock gains and overall market performance [1]

With a market cap of $55.1 billion, Valero Energy Corporation (VLO) is a leading global manufacturer and marketer of petroleum-based and low-carbon transportation fuels, operating across North America, the U.K., Ireland, and Latin America. The company runs refining, renewable diesel, and ethanol segments that produce a wide range of fuels and related products sold through wholesale markets and branded retail outlets. Companies valued at $10 billion or more are generally considered “large-cap” stocks, and ...

Core Insights - A competitive race is emerging among energy companies to construct a significant fuel pipeline to the U.S. West Coast, driven by the impending closure of two California refineries which may lead to soaring gasoline prices in the region [1] Industry Overview - Motorists in West Coast states have historically faced some of the highest fuel prices in the U.S. due to limited regional production and minimal connectivity to the Gulf Coast refining hub [2] - The closures of Phillips 66's Los Angeles plant and Valero Energy's Benicia refinery threaten to create a supply gap of nearly 280,000 barrels per day, presenting an opportunity for pipeline operators [3] Competitive Landscape - Three groups have proposed different projects to address the supply void created by the refinery closures, including HF Sinclair, ONEOK, and a partnership between Phillips 66 and Kinder Morgan [3] - The first group to finalize an investment decision may secure a multi-billion-dollar opportunity, as multiple pipelines could negatively impact each other's margins [4] Political Environment - The planned refinery closures have intensified pressure on California's Governor to prevent fuel price surges, potentially facilitating the approval of new fossil fuel projects in a state traditionally opposed to "Big Oil" [5] Financing and Capacity Commitments - Securing at least 70% of the proposed projects' capacity is crucial for financing, giving an advantage to the Phillips 66-Kinder Morgan project and HF Sinclair's proposal [6] - None of the proponents have announced any capacity commitments yet, and proposals that reuse existing lines may have a better chance of regulatory approval [7][8] Market Dynamics - Refining executives express skepticism about the construction of new pipelines, citing California's access to waterborne fuels as a more favorable option due to timing and transportation costs [9] - Valero Energy's COO indicated that the company is unlikely to enter long-term shipping arrangements with any of the proposed projects, favoring waterborne options for sourcing barrels globally [10][11]

Market Overview - The market is experiencing significant selling pressure despite the end of the government shutdown, indicating a "buy the rumor, sell the news" scenario [2][3] - There is a rotation in the market, with certain sectors like healthcare and industrials showing renewed strength while high-flying stocks are losing momentum as 2025 approaches [4][5] Stock Picks Thermo Fisher Scientific - This diagnostic research company has shown upward momentum, increasing by 38% over the last six months, and is expected to maintain this trend [8][7] - The suggested trade involves buying the stock and writing a call option for January, aiming to capture potential upside [15] Danaher Corporation - Danaher is also a diagnostics company that has shown resilience, with a nearly 10% increase in the last month, and is expected to continue its upward trajectory [17][15] - The trade example is a defined risk call spread to capture upside while managing risk in case of market weakness [16] Valero Energy - Valero, involved in oil and gas refining and renewable energy, has maintained upward momentum despite challenges in the broader energy sector, with a year-to-date increase of 48% [27][28] - The trade example is a risk reversal strategy, selling a 170 put and buying a 190 call for January, allowing for potential upside capture while providing a buffer against downside risk [35][36]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores are designed to complement the Zacks Rank, aiding in stock selection based on value, growth, and momentum [3][4][5][6][7] Zacks Style Scores - The Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [4][5][6][7] - Value Score emphasizes identifying undervalued stocks using financial ratios [4] - Growth Score assesses a company's potential for long-term growth based on earnings and sales projections [5] - Momentum Score tracks price trends to identify favorable investment opportunities [6] - VGM Score combines all three styles to highlight stocks with the best overall characteristics [7] Zacks Rank - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to guide investors [8] - Stocks rated 1 (Strong Buy) have historically outperformed the S&P 500, with an average annual return of +23.93% since 1988 [8] - A large number of stocks are rated, with over 800 top-rated options available, making it essential to use Style Scores for better selection [9] Investment Strategy - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - Stocks with lower ranks but high Style Scores may still pose risks due to downward earnings forecasts [11] Company Spotlight: Valero Energy - Valero Energy Corporation is the largest independent refiner and marketer of petroleum products in the U.S., with a refining capacity of 3.1 million barrels per day [12] - Currently rated 3 (Hold) with a VGM Score of A, Valero has a Momentum Style Score of A and has seen a 10.3% increase in shares over the past four weeks [12][13] - Recent upward revisions in earnings estimates for fiscal 2025 indicate strong potential, with the Zacks Consensus Estimate rising by $1.23 to $9.21 per share [13]

Group 1 - Futures rose as the House voted to end the government shutdown, leading to a positive market reaction [1][2] - The Dow Jones Industrial Average reached a new high, indicating a rebound in key indexes [1][4] - Companies such as Intuitive Surgical, Goldman Sachs, and Valero Energy are highlighted as strong performers in the current market [1][4] Group 2 - Bank stocks showed strength, with major banks moving above buy points, suggesting potential investment opportunities [4] - Eli Lilly and AI-related stocks are leading the market, indicating sectors that may be worth monitoring for future growth [4] - The market is testing key levels, with companies like Palantir, Valero Energy, and MongoDB in focus for potential breakouts [4]

Group 1 - Valero Energy (VLO) is targeting a 52-week high and is currently the IBD Stock of the Day, indicating strong market interest [2] - The stock experienced a significant surge of 7% on October 23, marking its best performance since April, following the company's third-quarter earnings that exceeded profit and sales expectations [2] - Company executives provided positive commentary to analysts, suggesting confidence in future performance [2] Group 2 - The overall market has shown volatility, but certain stocks, including Valero Energy, have demonstrated renewed technical strength [5] - Valero Energy has achieved a relative strength rating of over 80, indicating strong price performance compared to its peers [5] - The stock's recent breakout is attributed to favorable market conditions, including rising oil prices and strategic movements in the energy sector [5]