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Can Valero Energy (VLO) Keep Earnings Streak Alive in Q2?
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Valero Energy Corporation (VLO - Free Report) is set to report second-quarter 2018 results on Jul 26, before the market opens.
The leading independent refining player surpassed the Zacks Consensus Estimate in the last four quarters, the average positive earnings surprise being 8.8%. Let’s see how things are shaping up prior to the announcement.
Why a Likely Positive Surprise?
Our proven model shows that Valero Energyis likely to beat earnings because it has the right combination of two key ingredients.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at +1.32%. This is a very meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Valero Energycarries a Zacks Rank #3 (Hold), which when combined with a +1.32% ESP makes us confident about an earnings beat.
Note that stocks with Zacks Ranks #1, 2 or 3 have a significantly higher chance of beating earnings. Meanwhile, Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Valero Energy is among the leading independent refining players in the domestic market, with 15 petroleum refineries. The Zacks Consensus Estimate for throughput margin per barrel from the company’s refining operations is pegged at $10.84, higher than $8.36 in the preceding quarter and $8.66 in the year-ago quarter.
Higher expected throughput margin will likely aid the company’s refining businesses. As a result, the Zacks Consensus Estimate for second-quarter operating income at the refining segment is pegged at $1,341 million, considerably higher than $922 million and $959 million in the prior-quarter and the year-ago quarter, respectively.
Moreover, the Zacks Consensus Estimate for operating income at the ethanol segment for the second quarter is pinned at $46.73 million, up from $45 million reported in the preceding quarter and $31 million a year ago.
The Zacks Consensus Estimate for operating income at the VLP segment is pegged at $88 million, higher than $84 million in the January-to-March quarter of 2018 and $71 million in the April-to-June quarter of 2017.
We can conclude that better-than-expected performance by all the business units will likely aid the company post handsome numbers in the second quarter.
Other Stocks That Warrant a Look
Other stocks in the energy sector that have a positive Earnings ESP and a favorable Zacks Rank are:
ConocoPhillips (COP - Free Report) , based in Houston, TX, is a leading upstream energy firm. The company has an Earnings ESP of +6.54% and flaunts a Zacks Rank #1.
Houston, TX-based EOG Resources, Inc (EOG - Free Report) is a major independent oil and gas exploration and production player. The company has an Earnings ESP of +1.36% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Can Valero Energy (VLO) Keep Earnings Streak Alive in Q2?
Valero Energy Corporation (VLO - Free Report) is set to report second-quarter 2018 results on Jul 26, before the market opens.
The leading independent refining player surpassed the Zacks Consensus Estimate in the last four quarters, the average positive earnings surprise being 8.8%. Let’s see how things are shaping up prior to the announcement.
Why a Likely Positive Surprise?
Our proven model shows that Valero Energyis likely to beat earnings because it has the right combination of two key ingredients.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, stands at +1.32%. This is a very meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Valero Energycarries a Zacks Rank #3 (Hold), which when combined with a +1.32% ESP makes us confident about an earnings beat.
Note that stocks with Zacks Ranks #1, 2 or 3 have a significantly higher chance of beating earnings. Meanwhile, Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
Valero Energy Corporation Price and EPS Surprise
Valero Energy Corporation Price and EPS Surprise | Valero Energy Corporation Quote
What’s Driving the Better-Than-Expected Earnings?
Valero Energy is among the leading independent refining players in the domestic market, with 15 petroleum refineries. The Zacks Consensus Estimate for throughput margin per barrel from the company’s refining operations is pegged at $10.84, higher than $8.36 in the preceding quarter and $8.66 in the year-ago quarter.
Higher expected throughput margin will likely aid the company’s refining businesses. As a result, the Zacks Consensus Estimate for second-quarter operating income at the refining segment is pegged at $1,341 million, considerably higher than $922 million and $959 million in the prior-quarter and the year-ago quarter, respectively.
Moreover, the Zacks Consensus Estimate for operating income at the ethanol segment for the second quarter is pinned at $46.73 million, up from $45 million reported in the preceding quarter and $31 million a year ago.
The Zacks Consensus Estimate for operating income at the VLP segment is pegged at $88 million, higher than $84 million in the January-to-March quarter of 2018 and $71 million in the April-to-June quarter of 2017.
We can conclude that better-than-expected performance by all the business units will likely aid the company post handsome numbers in the second quarter.
Other Stocks That Warrant a Look
Other stocks in the energy sector that have a positive Earnings ESP and a favorable Zacks Rank are:
Occidental Petroleum Corporation (OXY - Free Report) is involved in both oil and gas exploration and midstream energy businesses. The company has an Earnings ESP of +2.82% and has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
ConocoPhillips (COP - Free Report) , based in Houston, TX, is a leading upstream energy firm. The company has an Earnings ESP of +6.54% and flaunts a Zacks Rank #1.
Houston, TX-based EOG Resources, Inc (EOG - Free Report) is a major independent oil and gas exploration and production player. The company has an Earnings ESP of +1.36% and a Zacks Rank #2.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>