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Valero Energy (VLO) Stock Sinks As Market Gains: What You Should Know

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Valero Energy (VLO - Free Report) closed at $81.29 in the latest trading session, marking a -0.79% move from the prior day. This change lagged the S&P 500's daily gain of 0.2%.

Heading into today, shares of the oil refiner had gained 4.38% over the past month, outpacing the Oils-Energy sector's gain of 4.02% and the S&P 500's gain of 1.06% in that time.

Wall Street will be looking for positivity from VLO as it approaches its next earnings report date. On that day, VLO is projected to report earnings of $0.76 per share, which would represent year-over-year growth of 160.8%. Meanwhile, our latest consensus estimate is calling for revenue of $22.34 billion, up 114.84% from the prior-year quarter.

VLO's full-year Zacks Consensus Estimates are calling for earnings of $1.20 per share and revenue of $90.61 billion. These results would represent year-over-year changes of +138.46% and +39.59%, respectively.

Investors should also note any recent changes to analyst estimates for VLO. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 23.46% higher within the past month. VLO is currently a Zacks Rank #4 (Sell).

Digging into valuation, VLO currently has a Forward P/E ratio of 68.19. For comparison, its industry has an average Forward P/E of 33.59, which means VLO is trading at a premium to the group.

Also, we should mention that VLO has a PEG ratio of 12.43. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Oil and Gas - Refining and Marketing was holding an average PEG ratio of 3.24 at yesterday's closing price.

The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 233, putting it in the bottom 9% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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