Valued at a market cap of around $48.4 billion, Texas-based Valero Energy Corporation (VLO) is a global leader in fuel and petrochemical production. With 15 refineries processing 3.2 million barrels daily, two renewable diesel plants producing 1.2 billion gallons annually, and 12 ethanol plants churning out 1.6 billion gallons, Valero powers the world through its Refining, Renewable Diesel, and Ethanol segments. The energy giant is slated to announce its fiscal Q2 earnings results on Thursday, July 25.
Ahead of this event, analysts are expecting VLO to report a profit of $4.25 per share, down 21.3% from $5.40 per share in the year-ago quarter. However, the company holds a solid track record of beating Wall Street's bottom-line estimates in each of the last four quarters. Moreover, in the last reported quarter, the company's adjusted EPS dipped a notable 53.8% year over year to $3.82 but still managed to crush the consensus EPS estimate by a solid 20.1% margin.
Looking forward to fiscal 2024, analysts forecast VLO to report EPS of $15.34, representing a 38.4% decline from $24.90 recorded in fiscal 2023.
Shares of Valero have surged nearly 27.4% over the past 52 weeks, slightly outpacing the broader S&P 500 Index’s ($SPX) gain of 26.9% over the same time frame. Narrowing the focus, the stock’s double-digit return over the past 52 weeks also blew past the S&P 500 Energy Sector SPDR’s (XLE) 9.9% gain during the same period.
Despite sailing past Wall Street’s bottom-line estimates, its Q1 earnings results announced on April 25 failed to excite investors, as evidenced by its share remaining nearly flat post-announcement. This lukewarm response can be mainly attributed to the declining trajectory observed in its revenue and earnings.
Nevertheless, while geopolitical unrest has weighed down on the company’s prospects lately, Valero’s unwavering commitment to rewarding its shareholders continues to make it an enticing choice for investors. For instance, on June 28, the company paid its shareholders a quarterly dividend of $1.07 per share, triggering an almost 1.8% surge in its share on the very same day.
Analysts' consensus rating on VLO stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 16 analysts covering the stock, 12 recommend a "Strong Buy," three suggest “Hold,” and the remaining one gives a "Strong Sell" rating. This configuration has remained consistent over the past three months.
The average analyst price target for VLO is $176.50, suggesting a modest potential upside of almost 20.6% from the current levels.
On the date of publication, Anushka Mukherjee did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
