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Is a Beat in Store for Valero Energy (VLO) in Q4 Earnings?

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Valero Energy Corporation (VLO - Free Report) is set to report fourth-quarter 2022 results on Jan 26, before the opening bell.

In the last reported quarter, the company’s bottom line beat the Zacks Consensus Estimate on increased refinery throughput volumes and a higher refining margin. Valero Energy surpassed the Zacks Consensus Estimate in each of the last four quarters, the average being 25.2%.

Let’s see how things have shaped up prior to this announcement.

Valero Energy Corporation Price and EPS Surprise

Valero Energy Corporation Price and EPS Surprise

Valero Energy Corporation price-eps-surprise | Valero Energy Corporation Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for fourth-quarter earnings per share of $7.25 has witnessed three upward revisions in the past seven days. The estimated figure suggests an improvement of 193.5% from the prior-year reported number.

The consensus estimate for fourth-quarter revenues of $40.9 billion indicates a 14.1% improvement from the year-ago reported figure.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for Valero Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Valero Energy has an Earnings ESP of +1.42%. This is because the Most Accurate Estimate for the quarter’s earnings is $7.35 per share, while the Zacks Consensus Estimate is $7.25. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: Valero Energy currently carries a Zacks Rank #3.

Factors to Note

Strong recovery in fuel demand amid a significant crunch in worldwide refining capacity is likely to have created a good spot for Valero Energy. This is because VLO is a lowest-cost producer of fuels with 15 refineries.

Being a best-in-class oil refiner, Valero Energy is likely to have capitalized on the strong demand for petroleum products. The Zacks Consensus Estimate for VLO’s fourth-quarter operating profit from the refining segment is pegged at $3,315 million, suggesting a massive improvement from the year-ago quarter profit of $1,270 million.

Other Stocks to Consider

Here are some other firms that you may want to consider, as these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

Enterprise Products Partners (EPD - Free Report) has an Earnings ESP of +4.13% and is a Zacks #3 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.

Enterprise is scheduled to release fourth-quarter results on Feb 1. The Zacks Consensus Estimate for EPD’s earnings is pegged at 61 cents per share, suggesting an increase of 17.3% from the prior-year reported figure.

BP plc (BP - Free Report) has an Earnings ESP of +1.38% and a Zacks Rank of 3.

BP is scheduled to report fourth-quarter results on Feb 7. The Zacks Consensus Estimate for its earnings is pegged at $1.75 per share, suggesting a significant increase from the prior-year reported figure.

Halliburton Company (HAL - Free Report) has an Earnings ESP of +0.30% and a Zacks Rank #2.

Halliburton is scheduled to release fourth-quarter earnings on Jan 24. The Zacks Consensus Estimate for HAL’s earnings is pegged at 67 cents per share, suggesting a massive increase from the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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