Valero Energy Corporation (VLO) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Valero Energy Corporation (VLO) Energy Operations & Outlook

Valero Energy Corporation, a major player in the Oil & Gas Refining & Marketing industry, focuses on transportation fuels and petrochemicals. With 15 petroleum refineries and 12 ethanol plants, Valero serves markets across North America and Europe, marketing through a network of branded outlets and wholesale channels.

What Is the Investment Thesis for VLO?

Valero Energy Corporation presents a compelling investment case based on its extensive refining capacity, integrated operations, and strategic focus on renewable diesel. With a market capitalization of $99.7B and a P/E ratio of 21.6, Valero demonstrates a solid financial foundation. The company's dividend yield of 1.90% offers an attractive income stream for investors. Key growth catalysts include increasing demand for transportation fuels and renewable energy sources. However, potential risks include fluctuations in crude oil prices and evolving environmental regulations. Valero's ability to maintain operational efficiency and adapt to changing market dynamics will be crucial for sustained profitability.

Based on FMP financials and quantitative analysis

VLO Key Highlights

Market Cap of $99.7B reflects Valero's significant presence in the energy sector.

• P/E Ratio of 21.6 indicates a reasonable valuation relative to earnings.
• Profit Margin of 3.3% demonstrates the company's ability to generate profit from its revenue.
• Gross Margin of 7.2% shows the profitability of Valero's core operations after accounting for the cost of goods sold.
• Dividend Yield of 1.90% provides an attractive income stream for investors.

Who Are VLO's Competitors?

VLO is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance

What Are VLO's Key Strengths?

Large refining capacity with 15 petroleum refineries.

• Integrated operations with pipelines and logistics assets.
• Strong brand recognition with multiple retail brands.
• Growing renewable diesel production capacity.

What Are VLO's Weaknesses?

Exposure to fluctuating crude oil prices.

• Dependence on fossil fuels.
• Vulnerability to environmental regulations.
• Lower profit margin compared to some competitors (3.3%).

What Could Drive VLO Stock Higher?

Increasing demand for renewable diesel driven by environmental regulations.

• Potential for increased refining margins due to global supply constraints.
• Expansion of renewable diesel production capacity in 2027.
• Strategic acquisitions and partnerships to expand market presence.

What Are the Key Risks for VLO?

Insider selling — insiders were net sellers of roughly $6.2M recently.

• Fluctuations in crude oil prices impacting profitability.
• Stricter environmental regulations increasing compliance costs.
• Economic downturns reducing demand for transportation fuels.
• Geopolitical instability affecting crude oil supply.
• Technological disruptions in the energy sector.

What Are the Growth Opportunities for VLO?

• Expansion of Renewable Diesel Production: Valero's investment in renewable diesel production presents a significant growth opportunity. The increasing demand for low-carbon fuels, driven by environmental regulations and consumer preferences, is expected to fuel growth in the renewable diesel market. Valero's existing renewable diesel plant and potential for further expansion position the company to capitalize on this trend. The renewable diesel market is projected to reach $35 billion by 2028, offering substantial growth potential for Valero.
• Increased Refining Capacity Utilization: Optimizing the utilization of Valero's existing refining capacity can drive revenue growth and improve profitability. By enhancing operational efficiency and reducing downtime, Valero can increase its throughput capacity and produce more refined products. The company's 15 petroleum refineries have a combined throughput capacity of approximately 3.2 million barrels per day, providing ample opportunity for optimization. A 5% increase in capacity utilization could translate to a significant boost in revenue.
• Strategic Acquisitions and Partnerships: Valero can pursue strategic acquisitions and partnerships to expand its market presence and diversify its product portfolio. Acquiring smaller refineries or partnering with renewable energy companies can enhance Valero's competitive position and drive long-term growth. The company's strong financial position provides the flexibility to pursue such opportunities. Potential acquisition targets include regional refineries and renewable energy technology providers.
• Expansion of Retail Outlets: Valero can expand its network of retail outlets under its various brands, including Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco. Increasing the number of branded outlets can enhance Valero's brand recognition and drive sales of its refined products. The company currently has approximately 7,000 outlets, providing a solid foundation for expansion. A targeted expansion strategy in high-growth markets can yield significant returns.
• Investment in Petrochemical Production: Valero's petrochemical production offers another avenue for growth. The demand for petrochemical products is expected to increase in line with global economic growth. By investing in new petrochemical facilities or expanding existing ones, Valero can diversify its revenue streams and reduce its reliance on transportation fuels. The petrochemical market is projected to reach $800 billion by 2028, offering substantial growth potential for Valero.

What Are VLO's Competitive Advantages?

• Scale: Operates a large network of refineries and ethanol plants.
• Integrated Operations: Owns and operates pipelines, terminals, and other logistics assets.
• Brand Recognition: Markets refined products under well-known brands like Valero and Texaco.
• Technological Expertise: Employs advanced refining technologies to optimize production and efficiency.

What Does VLO Do?

Valero Energy Corporation, founded in 1980 and headquartered in San Antonio, Texas, has evolved into a prominent player in the energy sector. Originally known as Valero Refining and Marketing Company, the company rebranded in 1997 to reflect its expanding operations. Valero manufactures, markets, and sells transportation fuels and petrochemical products across the United States, Canada, the United Kingdom, and Ireland. The company operates through three primary segments: Refining, Renewable Diesel, and Ethanol. Valero's Refining segment produces a wide array of products, including conventional, premium, and reformulated gasolines, diesel fuels, jet fuels, blendstocks, asphalts, petrochemicals, and lubricants. The Renewable Diesel segment focuses on producing renewable diesel from animal fats, used cooking oils, and inedible distillers corn oils. The Ethanol segment produces and sells ethanol, dry distiller grains, syrup, and inedible corn oil. As of December 31, 2021, Valero owned 15 petroleum refineries with a combined throughput capacity of approximately 3.2 million barrels per day and 12 ethanol plants with a combined ethanol production capacity of approximately 1.6 billion gallons per year. The company distributes its refined products through wholesale rack and bulk markets and approximately 7,000 outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brands. Valero also owns and operates crude oil and refined petroleum products pipelines, terminals, tanks, marine docks, truck rack bays, and other logistics assets, enhancing its supply chain and distribution capabilities.

What Products and Services Does VLO Offer?

• Refines crude oil into transportation fuels like gasoline, diesel, and jet fuel.
• Produces renewable diesel from animal fats, used cooking oils, and inedible distillers corn oils.
• Manufactures and sells petrochemical products.
• Produces and sells ethanol, dry distiller grains, syrup, and inedible corn oil.
• Markets refined products through wholesale rack and bulk markets.
• Sells refined products through approximately 7,000 outlets under various brands.
• Owns and operates pipelines, terminals, and other logistics assets.

How Does VLO Make Money?

• Refining: Converts crude oil into higher-value transportation fuels and petrochemicals.
• Renewable Diesel: Produces renewable diesel from sustainable feedstocks.
• Ethanol: Manufactures and sells ethanol and related products.
• Marketing and Sales: Distributes refined products through wholesale and retail channels.

What Industry Does VLO Operate In?

Valero Energy Corporation operates within the highly competitive oil and gas refining and marketing industry. The industry is characterized by fluctuating crude oil prices, evolving environmental regulations, and increasing demand for renewable energy sources. Valero competes with major integrated oil companies and independent refiners. The company's focus on renewable diesel positions it favorably amid the growing emphasis on sustainable energy solutions. The refining industry is subject to cyclical trends, with profitability influenced by refining margins and inventory levels.

Who Are VLO's Key Customers?

• Wholesale fuel distributors and retailers.
• Commercial and industrial consumers of fuels and petrochemicals.
• Consumers purchasing fuel at branded retail outlets.
• Animal feed customers purchasing ethanol byproducts.

Valero Energy Corporation (VLO) Valuation Context

Valued at $99.7B, VLO is classified as a large-cap stock. Relative to its peer group, VLO's quantitative score of 96/100 is above the peer average of 61/100.

VLO Revenue & Earnings Trend

In Q2 2026, VLO generated $36.65B in top-line revenue, marking a sequential increase of 13.2%. The company recorded net income of $3.72B, with diluted EPS of $12.62. Revenue has increased across the last three reported quarters, suggesting sustained momentum for this large-cap Energy company. Across the four most recent quarters, VLO averaged $6.03 in diluted EPS.

Company Profile

Valero Energy Corporation operates in the Oil & Gas Refining & Marketing industry within the Energy sector. It is headquartered in San Antonio, US. The company is led by CEO R. Lane Riggs. VLO has traded publicly since 1982.

Return on equity for Valero Energy Corporation stands at 29.9%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 11.2%, showing how much profit it generates from its asset base. VLO trades at a trailing price-to-earnings ratio of 21.63, above the Energy sector average of ~19x. Its free cash flow yield is 10.2%, a gauge of the cash the business throws off relative to its market value. A current ratio of 1.64 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 7.1%, the inverse of the P/E and a quick read on earnings relative to price.

Valero Energy Corporation's Piotroski F-Score is 8/9, a 9-point checklist of profitability, leverage and efficiency — signaling solid underlying fundamentals. Its Altman Z-Score of 5.52 places it in the safe zone, indicating low near-term bankruptcy risk.

Valero Energy Corporation has beaten Wall Street's EPS estimate in 8 of its last 8 reported quarters — a consistent record of delivering on expectations. Reported results have landed about 135.9% above estimates on average.

Wall Street analysts project Valero Energy Corporation revenue of about $145.64B for fiscal 2026, with EPS near $37.66. The estimate reflects 9 contributing analysts.

Over the past six months, Valero Energy Corporation insiders filed 30 SEC Form 4 transactions — 14 sales and 16 purchases. On net that is roughly 15K shares disposed (about $6.2M), a signal worth weighing alongside the fundamentals.

VLO Financials

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VLO Analyst Consensus

VLO MoonshotScore

Latest Valero Energy Corporation Analysis

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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