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Valero Energy Corporation
S&P 500
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$119.1B
Market Cap
21.5
P/E
0.76
PEG
10.4%
ROCE
8.3%
ROE
0.44
D/E
4.1%
OPM
0.0%
% from 52W High
96
α RS
🔍 VLO is showing a high-conviction setup because it matches 7 of 39 tracked screener presets, Sector RRG has Energy in the Leading quadrant with the trail still strengthening, and RS Rating is 96 (top decile vs market). Net: Broad signal stack, not a recommendation. ? Conviction RRG RS Rating
Sources
Conviction 7/39 · Energy in Leading quadrant · RS Rating 96
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About

Valero Energy Corporation manufactures, markets, and sells petroleum-based and low-carbon liquid transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, Latin America, Mexico, Peru, and internationally. It operates through three segments: Refining, Renewable Diesel, and Ethanol. The company produces California Reformulated Gasoline Blendstock for Oxygenate Blending (CARBOB) and Conventional Blendstock for Oxygenate Blending (CBOB) gasolines, CARB diesel, diesel, jet fuel, heating oil, and asphalt; feedstocks; aromatics; sulfur and residual fuel oil; intermediate oils; and sulfur, sweet, and sour crude oils. It sells its refined products through wholesale rack and bulk markets; and through outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brands. The company also owns and operates renewable diesel and ethanol plants, as well as produces and sells renewable diesel, renewable naphtha, and neat sustainable aviation fuel under the Diamond Green Diesel brand name. In addition, it offers ethanol and various co-products, including dry distillers grains, syrup, and inedible distillers corn oil to animal feed customers. The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1980 and is headquartered in San Antonio, Texas.

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Good quarter Investor Presentation One-Pager? Q2 2026
Net Income
$3.7B
+418% YoY
EPS
$12.62
+453% YoY
Refining Operating Income
$4.5B
+246% YoY
Renewable Diesel Operating Income
$717M
vs -$79M YoY
What Went Right
  • Refining operating income jumped to $4.5B from $1.3B, with throughput averaging 3.0M bpd.
  • Renewable diesel swung to $717M operating income from a -$79M loss, helped by higher RINs and lower feedstock costs.
  • Ethanol operating income rose to $318M from $54M, aided by higher gasoline/octane values and the Production Tax Credit.
What to Watch
  • Port Arthur DHT unit repair costs estimated at $250M, with the unit expected to return by year-end; refinery otherwise running at normal rates.
  • Global refining capacity offline is around 5M bpd from Middle East/Russia, and product inventories remain ~130M bbl below seasonal norms.
  • RINs market is short; the D4 bank could run out between end-2026 and mid-2027, creating policy and affordability risk.
Management Guidance
  • Revenue guidance not provided.
  • Q3 refining throughput expected at 2.80–2.90M bpd combined, with regional ranges given; refining cash opex ~$4.75/bbl.
  • 2026 Valero-attributable capex ~$2B, of which ~$1.7B is sustaining; Q3 net interest ~$140M, D&A ~$700M, and FY G&A ~$960M.
Investor Lens
The thesis is stronger after this call: Valero delivered record earnings and management argues product cracks are now set by hydro-skimming margins rather than cracking margins, implying a structurally higher mid-cycle. The balance sheet is very strong — $7.9B cash, 11% net debt-to-cap — and management is deliberately building cash while still returning $2.6B to shareholders. Key risks are geopolitical supply disruptions, the Port Arthur DHT outage, and RINs policy uncertainty, but Q3 capture rates and margins look constructive so far.
From investor presentation · AI-generated analysis · Not investment advice
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📈 STRONG Record Q2: net income $3.7B, EPS $12.62, all segments strong.
Revenue
Revenue was not explicitly disclosed. Segment operating income totalled roughly $5.5B, led by refining at $4.5B.
Profitability
Net income attributable to Valero stockholders was $3.7B, or $12.62 per share, versus $714M, or $2.28, in Q2 2025. Adjusted EPS was $12.54.
Margins
Refining cash operating expenses were $4.70/bbl in Q2, with Q3 guidance of ~$4.75/bbl. Renewable diesel opex guided at $0.49/gal and ethanol at $0.39/gal; no consolidated margin was disclosed.
Balance Sheet
Ended the quarter with $7.9B cash, $9.1B total debt, and $2.2B finance leases; net debt-to-cap was 11%. Operating cash flow was $5.6B, and cash built $2.1B during the quarter.
Key Risks
Management flagged ~5M bpd of global refining capacity offline, product inventories ~130M bbl below seasonal norms, and a short RINs market. The Port Arthur DHT repair is a $250M cost with substantial insurance expected, and Russian refining outages are worsening.
Outlook
Q3 refining throughput is guided at 2.80–2.90M bpd and cash opex at ~$4.75/bbl. Management says margins and capture rates so far look constructive versus Q2.
Generated by AI · Q2 2026 results · Not investment advice
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✓ 📞 Earnings Call Transcripts (5 quarters) submit a missing quarter
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📞 Earnings Call Transcripts (5)
Q2 2026 Q2 2026 2026-07-30
Record Q2 results driven by strong refining, renewable diesel, and ethanol performance, with net income surging to $3.7B and robust cash flow. Tight global supply, resilient demand, and disciplined capital allocation support a positive outlook, despite ongoing market volatility.
Q1 2026 Q1 2026 2026-04-30
Q1 2026 saw robust financial and operational results, with $1.3B net income and strong segment performance amid volatile markets. Strategic investments, disciplined capital allocation, and proactive risk management position the company well for continued resilience and growth.
Q4 2025 Q4 2025 2026-01-29
Record operational and financial performance in 2025, with strong Q4 results driven by favorable refining margins and throughput. Capital returns remained robust, and 2026 guidance points to continued disciplined investment and shareholder focus.
Q3 2025 Q3 2025 2025-10-23
Third quarter saw strong financial and operational results, with high refinery utilization, robust refining margins, and record ethanol production. Capital returns were significant, and outlook remains positive amid tight supply and ongoing technology improvements.
Q2 2025 Q2 2025 2025-07-24
Record refining throughput and strong diesel demand drove solid Q2 results, with net income of $714 million and a 52% payout ratio. Renewable Diesel faced losses amid policy uncertainty, while capital returns and liquidity remained robust.
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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
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Information Sources:
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