Valero(US:VLO) ZACKS·2026-01-22 18:50Core Insights - Valero Energy Corporation (VLO) is a significant player in the downstream energy sector, with a strong refining network capable of processing various feedstocks into higher-value refined products [1] Group 1: Market Environment - The benchmark West Texas Intermediate crude price is currently above $60 per barrel, down from $75.44 a year ago, indicating a favorable business environment for the downstream energy sector [2] - The U.S. Energy Information Administration (EIA) projects crude prices to decline to approximately $52.21 per barrel in 2026 and further to $50.36 per barrel in 2027 [2] Group 2: Company Performance - VLO benefits from lower crude prices, allowing the company to purchase inputs at a reduced cost, which is expected to enhance profit margins as crude prices continue to decline [3][8] - Valero's shares have increased by 39.3% over the past year, outperforming the industry composite stocks, which gained 15.3% [5] Group 3: Valuation Metrics - Valero trades at a trailing 12-month enterprise-value-to-EBITDA (EV/EBITDA) ratio of 9.08X, which is higher than the industry average of 4.56X [6] Group 4: Earnings Estimates - The Zacks Consensus Estimate for VLO's earnings for 2025 remains unchanged at $9.93, with current quarter and next quarter estimates at $3.05 and $1.97, respectively [10][11]