San Antonio, Texas-based Valero Energy Corporation (VLO) is an international manufacturer and marketer of transportation fuels and petrochemical products. Valued at $38.7 billion by market cap, Valero employs nearly 10,000 people and operates 15 petroleum refineries with a combined throughput capacity of approximately 3.2 million barrels per day.
The energy giant is set to announce its fourth-quarter earnings before the market opens on Thursday, Jan. 30. Ahead of the event, analysts expect Valero to report a profit of $0.40 per share, down 88.7% from $3.55 per share reported in the year-ago quarter. The company has surpassed Wall Street’s bottom-line estimates thrice over the past four quarters while missing on one other occasion. Its EPS for the last reported quarter tanked 84.8% year-over-year to $1.14, missing analysts’ estimates by 11.6%.
For fiscal 2024, analysts expect Valero to deliver an EPS of $8.10, down 67.5% from $24.90 in fiscal 2023. While in fiscal 2025, its earnings are expected to grow 7% year-over-year to $8.67.
VLO stock has plunged 3.9% over the past 52 weeks, underperforming the S&P 500 Index’s ($SPX) 25.8% surge and the Energy Select Sector SPDR Fund’s (XLE) 3.9% gains during the same time frame.
Shares of Valero Energy dropped 1.2% following the release of its Q3 results on Oct. 24 as the company’s revenues and earnings fell short of Wall Street’s expectations. The company’s financials took a sharp hit due to lean refining margins and low fuel demand coupled with increased global supply which has impacted companies across the oil refining industry. Its revenues plunged 14.4% year-over-year to $32.9 billion while its net income to shareholders dropped by a staggering 86.1% compared to the year-ago quarter to $364 million.
On a positive note, over the past three quarters, the company generated $5.6 billion in operating cash flows and repurchased $2.6 billion worth of common stock demonstrating its commitment to shareholders. Meanwhile, Valero is focusing on operational excellence and capital discipline which served it well through multiple commodity cycles.
Moreover, the consensus opinion on VLO is strongly bullish, with an overall “Strong Buy” rating. Out of the 18 analysts covering the stock, 14 recommend “Strong Buy,” three advise “Hold,” and one suggests a “Strong Sell” rating. Its mean price target of $150.28 indicates a 21.2% upside potential from current price levels.
