Jefferies analyst Dushyant Ailani has maintained their bullish stance on VLO stock, giving a Buy rating on April 18.
Dushyant Ailani has given his Buy rating due to a combination of factors that demonstrated Valero Energy’s strong performance in the first quarter. The company’s adjusted earnings per share (EPS) of $3.82 outperformed consensus estimates and Jefferies’ own forecast by approximately 18%, indicating a robust operational quarter. This impressive result was not isolated to one segment but was rather a comprehensive beat across refining, renewable diesel, and ethanol sectors. The company’s operational excellence was highlighted by greater efficiency and superior margin capture, particularly in the Gulf Coast and Midcontinent regions, as well as in the renewable diesel and ethanol segments.
Furthermore, Valero Energy’s commitment to shareholder returns was evident with the company returning $1.4 billion to its shareholders, which included significant stock buybacks. This aggressive capital return strategy led to a payout of 74% for the quarter, substantially higher than the target payout ratio of 40-50%. Ailani’s positive outlook is also likely supported by Valero’s strategic focus on the global refining outlook, sustainable aviation fuel (SAF) expansion, and the firm’s dedication to repurchasing shares. These factors combined present a compelling case for the Buy rating, suggesting confidence in the company’s future performance and strategic direction.
In another report released on April 18, Citi also maintained a Buy rating on the stock with a $192.00 price target.
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Valero Energy (VLO) Company Description:
Founded in 1980, Texas-based Valero Energy Corp. manufactures and markets transportation fuels and other petrochemical products. The company operates through three business segments: Refining, Ethanol and Renewable Diesel.
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