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]

Financial Performance - Valero reported net income attributable to stockholders of $281 million, or $0.88 per share, for Q4 2024, down from $1.2 billion, or $3.55 per share, in Q4 2023[3]. - For the full year 2024, net income attributable to stockholders was $2.8 billion, or $8.58 per share, compared to $8.8 billion, or $24.92 per share, in 2023[4]. - Net income attributable to Valero Energy Corporation stockholders for the three months ended December 31, 2024, was $281 million, compared to $1,202 million for the same period in 2023, a decrease of 76.7%[31]. - Adjusted net income attributable to Valero Energy Corporation stockholders for the year ended December 31, 2024, was $2,739 million, down from $8,850 million in 2023, a decline of 69.0%[31]. - Total revenues for the year ended December 31, 2024, were $129,881 million, a decrease of 10.2% from $144,766 million in 2023[29]. - Net cash provided by operating activities was $1.1 billion in Q4 2024, with adjusted net cash provided by operating activities at $951 million[9]. - Valero's adjusted net cash provided by operating activities for the year ended December 31, 2024, was $5,517 million, a decrease of 50.0% from $11,043 million in 2023[59]. Segment Performance - The Refining segment reported operating income of $437 million for Q4 2024, a significant decrease from $1.6 billion in Q4 2023, with throughput volumes averaging 3.0 million barrels per day[5]. - The Renewable Diesel segment achieved operating income of $170 million in Q4 2024, up from $84 million in Q4 2023, with sales volumes averaging 3.4 million gallons per day[6]. - Operating income for the refining segment for the year ended December 31, 2024, was $3,971 million, down from $11,511 million in 2023, representing a decline of 65.5%[29]. - Refining operating income for Q4 2024 was $437 million, a decrease of 72.2% compared to $1,577 million in Q4 2023[34]. - Renewable Diesel operating income increased to $170 million in Q4 2024 from $84 million in Q4 2023, representing a growth of 102.4%[34]. - Ethanol operating income decreased to $20 million in Q4 2024 from $190 million in Q4 2023, a decline of 89.5%[34]. Shareholder Returns - Valero returned $601 million to stockholders in Q4 2024, including $339 million in dividends and $262 million in stock buybacks, resulting in a payout ratio of 63% of adjusted net cash provided by operating activities[12]. - The company increased its quarterly cash dividend by 6% to $1.13 per share on January 16, 2025[13]. - The company declared dividends per common share of $1.07 for the three months ended December 31, 2024, compared to $1.02 in the same period of 2023, representing a 4.9% increase[61]. Debt and Capital Expenditures - Valero's total debt at the end of 2024 was $8.1 billion, with a debt to capitalization ratio of 17%[14]. - The total debt of Valero as of December 31, 2024, was $8,085 million, down from $9,218 million in 2023, reflecting a reduction of 12.3%[59]. - Capital expenditures attributable to Valero for the year ended December 31, 2024, were $1,888 million, an increase of 7.4% compared to $1,758 million in 2023[61]. - The capital investments expected for the year ending December 31, 2025, are projected to be $1,950 million after adjustments[61]. Operational Developments - The Sustainable Aviation Fuel (SAF) project at the DGD Port Arthur plant was completed and is now operational, allowing for the upgrade of approximately 50% of its renewable diesel production capacity to SAF[15]. - Valero is progressing with an FCC Unit Optimization project at the St. Charles Refinery, estimated to cost $230 million and expected to be completed in 2026[16]. Market Conditions - Brent crude oil price averaged $73.98 per barrel in Q4 2024, down from $82.72 per barrel in Q4 2023, a decrease of 11%[56]. - The average market reference price for ULS diesel was $2.23 per gallon for the three months ended December 31, 2024, down 21.8% from $2.85 per gallon in 2023[57]. - The biodiesel Renewable Identification Number (RIN) price was $0.66 per RIN for the three months ended December 31, 2024, down 21.4% from $0.84 in 2023[57]. Performance Metrics - The refining margin is a key performance measure, defined as refining segment operating income excluding operating expenses, depreciation, and amortization, which is critical for evaluating the segment's financial performance[69]. - Renewable Diesel margin is similarly defined and is essential for assessing the Renewable Diesel segment's operating and financial performance[69]. - Ethanol margin is defined as Ethanol segment operating income excluding operating expenses and is a significant measure for evaluating the Ethanol segment's performance[69]. - Adjusted refining operating income for the period is an important measure as it excludes non-core operating performance items[69].

Group 1 - Oil prices have experienced significant fluctuations in 2023, with WTI crude oil nearing $80 per barrel in January due to strong economic growth in China and the US [1] - The increase in oil prices is attributed to robust economic indicators, suggesting a potential rise in demand for crude oil [1] Group 2 - The article does not provide specific company or industry insights beyond the general trends in oil prices and economic conditions [1]

Core Viewpoint - Valero Energy Corporation (VLO) is expected to report a significant decline in earnings and revenues for the fourth quarter of 2024, with challenges stemming from weaker global refinery margins and reduced demand for refined products [2][3][5]. Earnings Performance - In the last reported quarter, Valero's adjusted earnings were $1.14 per share, missing the Zacks Consensus Estimate of $1.29 due to a decline in refining throughput volumes [2]. - The Zacks Consensus Estimate for fourth-quarter earnings per share is $0.14, reflecting a 96.06% decline from the prior year's figure [2]. - The estimated revenue for the fourth quarter is $30.75 billion, indicating a 13.16% decline from the previous year [3]. Factors Influencing Performance - Valero is expected to have maintained stable performance due to high refinery utilization rates, despite a 10% drop in spot prices for West Texas Intermediate Crude, which may have reduced input costs [4]. - Weaker global refinery margins are anticipated due to declining demand for refined petroleum products amid a global economic slowdown, with crack spreads showing contraction compared to the previous quarter [5]. - Lower margins on gasoline and distillates, particularly in the U.S. Gulf Coast, alongside high inflation and increased competition, are likely to have negatively impacted Valero's profitability [6]. Earnings Expectations - The current model does not indicate an earnings beat for Valero, with an Earnings ESP of -21.93% and a Zacks Rank of 3 (Hold) [7].

Core Viewpoint - Valero Energy (VLO) has gained attention as one of the most searched stocks, with significant recent performance and earnings estimates influencing its future stock price [1][2]. Earnings Estimates - Valero Energy is expected to report earnings of $0.14 per share for the current quarter, reflecting a year-over-year decline of -96.1% [5]. - The consensus earnings estimate for the current fiscal year is $7.93, indicating a decrease of -68.2% from the previous year [5]. - For the next fiscal year, the earnings estimate is $8.01, showing a slight increase of +1.1% compared to the prior year [6]. - Over the last 30 days, the earnings estimates have decreased by -12.7% for the current quarter and -12.3% for the current fiscal year [5][6]. Revenue Growth Forecast - The consensus sales estimate for the current quarter is $30.75 billion, representing a year-over-year decline of -13.2% [9]. - For the current and next fiscal years, the sales estimates are $129.88 billion and $121.48 billion, indicating changes of -10.3% and -6.5%, respectively [9]. Last Reported Results and Surprise History - In the last reported quarter, Valero Energy generated revenues of $32.88 billion, down -14.4% year-over-year [10]. - The reported EPS was $1.14, compared to $7.49 a year ago, with a revenue surprise of -0.5% and an EPS surprise of -11.63% [11]. Valuation - Valero Energy is graded A in the Zacks Value Style Score, suggesting it is trading at a discount compared to its peers [15]. - The evaluation of valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) is essential for determining the stock's intrinsic value [12][13]. Zacks Rank - Valero Energy holds a Zacks Rank of 3 (Hold), indicating it may perform in line with the broader market in the near term [7][16].

Core Viewpoint - Valero Energy (VLO) is anticipated to report a significant year-over-year decline in earnings due to lower revenues, which could influence its near-term stock price depending on how actual results compare to consensus estimates [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for January 30, 2025, with expectations of quarterly earnings at $0.14 per share, reflecting a year-over-year decrease of 96.1% [3]. - Revenues are projected to be $30.75 billion, down 13.2% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 12.71% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, suggesting no recent differing analyst views [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, with a strong predictive power for positive readings [7][8]. - Valero Energy's current Zacks Rank is 3, making it challenging to predict an earnings beat conclusively [11]. Historical Performance - In the last reported quarter, Valero Energy was expected to post earnings of $1.29 per share but delivered only $1.14, resulting in a surprise of -11.63% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [13]. Conclusion - While Valero Energy does not appear to be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [16].

Company Overview - Valero Energy (VLO) shares increased by 4.9% to $133.35 in the last trading session, with a higher-than-average trading volume, contrasting with a 1.5% loss over the past four weeks [1] - The company is part of the Zacks Oil and Gas - Refining and Marketing industry, which includes other companies like EnLink Midstream (ENLC) [4] Market Impact - The recent bullish trend in Valero's stock is attributed to new U.S. sanctions on Russian crude oil exports, which have disrupted global oil supply and led to a spike in oil prices [2] - Higher oil prices are expected to enhance margins for integrated refiners like Valero, as they can pass increased costs onto consumers through higher refined product prices [2] Earnings Expectations - Valero is projected to report quarterly earnings of $0.16 per share, reflecting a significant year-over-year decline of 95.5%, with revenues expected to be $30.43 billion, down 14.1% from the previous year [3] - The consensus EPS estimate for Valero has been revised 17.1% lower in the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] Industry Comparison - EnLink Midstream's consensus EPS estimate remains unchanged at $0.16, representing a year-over-year increase of 14.3%, and it also holds a Zacks Rank of 3 (Hold) [5]

Core Viewpoint - Brokerage recommendations, particularly for Valero Energy (VLO), may not be reliable indicators for investment decisions due to inherent biases and the misalignment of interests between brokerage firms and retail investors [2][4][16]. Brokerage Recommendation Trends - The average brokerage recommendation (ABR) for Valero Energy is 1.63, indicating a consensus leaning towards "Buy" [15]. - Out of 19 recommendations, 14 are classified as "Strong Buy," representing 73.7% of the total [8]. - Despite the positive ABR, studies suggest limited success of brokerage recommendations in predicting stock price increases [9]. Zacks Rank vs. ABR - The Zacks Rank, which is based on earnings estimate revisions, is a more reliable indicator of near-term stock performance compared to the ABR [10][18]. - The Zacks Consensus Estimate for Valero Energy has decreased by 1.8% over the past month, now standing at $8.24 [13]. - The Zacks Rank for Valero Energy is currently 5 (Strong Sell), indicating a negative outlook despite the favorable ABR [19]. Analyst Behavior and Market Impact - Analysts from brokerage firms tend to exhibit a strong positive bias in their recommendations, with a ratio of five "Strong Buy" to every "Strong Sell" [2]. - The vested interests of brokerage firms often lead to overly optimistic ratings that mislead investors [4][16].

Company Performance - Valero Energy (VLO) closed at $139.08, with a +0.38% change from the previous session, underperforming the S&P 500's daily gain of 0.56% [1] - Over the past month, Valero's shares have appreciated by 6.78%, outperforming the Oils-Energy sector's gain of 4.4% and the S&P 500's gain of 3.11% [1] Upcoming Financial Results - Valero Energy is expected to report EPS of $0.77, down 78.31% from the prior-year quarter, with quarterly revenue estimated at $32.06 billion, down 9.48% from the year-ago period [2] - For the entire fiscal year, earnings are predicted to be $8.92 per share and revenue at $131.15 billion, indicating changes of -64.18% and -9.4%, respectively, from the previous year [3] Analyst Estimates and Valuation - Recent changes to analyst estimates for Valero Energy suggest a changing business landscape, with positive revisions indicating optimism about the company's outlook [3] - The Zacks Rank system, which includes estimate changes, currently ranks Valero Energy at 3 (Hold) [5] - Valero Energy has a Forward P/E ratio of 15.53, which is lower than the industry average of 16.33, indicating it is trading at a discount [6] Industry Context - The Oil and Gas - Refining and Marketing industry has a Zacks Industry Rank of 208, placing it in the bottom 18% of all industries [8] - The average PEG ratio for Valero Energy is 2.59, matching the industry average [7]