The Goldman Sachs Group Forecasts Strong Price Appreciation for Valero Energy (NYSE:VLO) Stock

Key Points

• Goldman Sachs raised Valero Energy’s price target from $365 to $457 and maintained a “buy” rating, implying 21.27% upside from the stock’s $376.85 price.
• Valero’s latest quarter significantly exceeded expectations, with EPS of $12.54 versus the $10.11 consensus and revenue of $44.48 billion; revenue rose 48.8% year over year.
• Analyst sentiment remains broadly positive at a “Moderate Buy,” though Jefferies downgraded the stock to “hold” and risks include potentially cooling refining margins, demand destruction from high diesel prices and profit-taking.

Valero Energy (NYSE:VLO - Get Free Report) had its target price boosted by stock analysts at The Goldman Sachs Group from $365.00 to $457.00 in a research report issued on Wednesday, Benzinga reports. The brokerage currently has a "buy" rating on the oil and gas company's stock. The Goldman Sachs Group's price objective would suggest a potential upside of 21.27% from the company's current price.

A number of other equities research analysts have also issued reports on VLO. Citigroup lifted their target price on Valero Energy from $259.00 to $302.00 and gave the company a "neutral" rating in a research report on Tuesday, July 14th. Barclays upped their price target on Valero Energy from $279.00 to $323.00 and gave the stock an "overweight" rating in a research report on Friday, July 31st. Raymond James Financial lifted their price objective on shares of Valero Energy from $350.00 to $450.00 and gave the company a "strong-buy" rating in a report on Monday, September 14th. Weiss Ratings raised shares of Valero Energy from a "buy (b-)" rating to a "buy (b)" rating in a research report on Thursday, August 6th. Finally, Jefferies Financial Group restated a "hold" rating and set a $401.00 target price on shares of Valero Energy in a report on Tuesday. Two equities research analysts have rated the stock with a Strong Buy rating, nine have issued a Buy rating, eight have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and an average price target of $335.12.

Valero Energy Trading Down 4.2%

VLO opened at $376.85 on Wednesday. The stock has a market capitalization of $108.51 billion, a P/E ratio of 15.64, a P/E/G ratio of 0.27 and a beta of 0.57. The company has a current ratio of 1.64, a quick ratio of 1.23 and a debt-to-equity ratio of 0.37. Valero Energy has a 12 month low of $155.29 and a 12 month high of $419.04. The firm's fifty day simple moving average is $343.04 and its 200 day simple moving average is $281.07.

Valero Energy (NYSE:VLO - Get Free Report) last released its quarterly earnings results on Thursday, July 30th. The oil and gas company reported $12.54 earnings per share (EPS) for the quarter, beating the consensus estimate of $10.11 by $2.43. The firm had revenue of $44.48 billion for the quarter, compared to the consensus estimate of $39.47 billion. Valero Energy had a return on equity of 26.74% and a net margin of 5.17%.The company's revenue for the quarter was up 48.8% on a year-over-year basis. During the same quarter last year, the business posted $2.28 EPS. As a group, research analysts anticipate that Valero Energy will post 48.58 EPS for the current fiscal year.

Insider Buying and Selling at Valero Energy

In other news, SVP Eric Fisher sold 7,500 shares of the company's stock in a transaction that occurred on Monday, June 29th. The stock was sold at an average price of $268.17, for a total transaction of $2,011,275.00. Following the sale, the senior vice president owned 19,742 shares in the company, valued at $5,294,212.14. This represents a 27.53% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this link. 0.36% of the stock is owned by company insiders.

Hedge Funds Weigh In On Valero Energy

A number of institutional investors have recently added to or reduced their stakes in the company. Bank of America Corp DE grew its position in shares of Valero Energy by 11.4% in the 1st quarter. Bank of America Corp DE now owns 5,033,310 shares of the oil and gas company's stock valued at $1,243,630,000 after acquiring an additional 516,975 shares during the period. Norges Bank acquired a new stake in Valero Energy in the 4th quarter valued at about $1,111,542,000. Franklin Resources Inc. lifted its stake in Valero Energy by 7.5% in the 4th quarter. Franklin Resources Inc. now owns 5,668,210 shares of the oil and gas company's stock valued at $922,728,000 after purchasing an additional 394,693 shares during the last quarter. Bank of New York Mellon Corp grew its holdings in Valero Energy by 9.4% during the first quarter. Bank of New York Mellon Corp now owns 2,969,320 shares of the oil and gas company's stock worth $733,660,000 after purchasing an additional 254,604 shares during the period. Finally, Arrowstreet Capital Limited Partnership increased its position in Valero Energy by 18.4% during the first quarter. Arrowstreet Capital Limited Partnership now owns 2,842,339 shares of the oil and gas company's stock worth $702,285,000 after buying an additional 442,177 shares during the last quarter. 78.69% of the stock is currently owned by institutional investors and hedge funds.

Key Headlines Impacting Valero Energy

Here are the key news stories impacting Valero Energy this week:

• Positive Sentiment: Jefferies’ $401 price target implies potential upside from recent levels, even though the firm now recommends holding rather than buying VLO. Jefferies Downgrades Valero Energy to Hold From Buy
• Positive Sentiment: VLO remains supported by strong refining fundamentals. Its latest reported quarter substantially exceeded earnings and revenue expectations, and Zacks recently identified the company as a candidate for an upcoming earnings beat. Stocks Likely to Deliver Earnings Beats
• Neutral Sentiment: A comparison of Valero with renewable-natural-gas company OPAL Fuels presents VLO as a larger, more established energy business, but does not identify a new company-specific catalyst. Analyzing OPAL Fuels and Valero Energy
• Negative Sentiment: Jefferies’ downgrade signals that much of the refining-stock rally may already be priced in, prompting investors to reduce exposure after VLO’s strong gains. Valero and Marathon Cut at Jefferies
• Negative Sentiment: Record diesel prices have benefited Valero, but they may also encourage demand destruction. Possible export restrictions represent an additional risk to refining margins and fuel sales. Diesel Hits a Record
• Negative Sentiment: Lower crude prices, broader weakness across the energy sector and investor profit-taking have weighed on VLO. The stock’s recent decline appears more related to sector rotation and cooling refining momentum than to a newly reported operational problem. Valero Slides as Refining Trade Cools

Valero Energy Company Profile

Valero Energy Corporation is an international energy company headquartered in San Antonio, Texas. Its primary business is refining crude oil into transportation fuels and other products, including gasoline, diesel, jet fuel, asphalt, lubricants and petrochemical feedstocks.

Valero operates refineries and related facilities in the United States, Canada and the United Kingdom, and markets its products through wholesale and commercial channels in North America and other international markets.

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