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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 2021 results on Jan 27, before the opening bell.

In the last reported quarter, Valero Energy beat the Zacks Consensus Estimate for the bottom line on increased refinery throughput volumes and higher refining margin. Valero Energy surpassed the Zacks Consensus Estimate in each of the last four quarters, the average being 73.3%.

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

Trend in Estimate Revision

The Zacks Consensus Estimate for fourth-quarter earnings per share of $1.68 has witnessed no downward revision and four upward revisions in the past 30 days. The estimated figure suggests an improvement of 258.5% from the prior-year reported number.

The consensus estimate for fourth-quarter revenues of $28.9 billion indicates a 73.8% 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 +3.40%. This is because the Most Accurate Estimate for the quarter’s earnings is $1.74 per share, while the Zacks Consensus Estimate is $1.68. 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 Driving the Better-Than-Expected Earnings

Fuel demand has improved drastically in the December quarter of 2022 compared to the prior-year comparable period, thanks to the rolling out of coronavirus vaccines at a massive scale. With people starting to go to office and travelling, gasoline demand improved significantly.

Being a best-in-class oil refiner, Valero Energy is likely to have capitalized the mounting demand for petroleum products. The Zacks Consensus Estimate for VLO’s fourth-quarter operating profit from the refining segment is pegged at $1,012 million, suggesting a turnaround from the year-ago quarter loss of $377 million.

Other Stocks to Consider

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

PBF Energy Inc. (PBF - Free Report) has an Earnings ESP of +253.12% and is a Zacks #3 Ranked player. You can see the complete list of today’s Zacks #1 Rank stocks here.

PBF Energy is scheduled to release fourth-quarter results on Feb 10. The Zacks Consensus Estimate for PBF’s earnings is pegged at 11 cents per share, suggesting an increase of 102.4% from the prior-year reported figure.

Viper Energy Partners (VNOM - Free Report) has an Earnings ESP of +12.82% and a Zacks Rank of 3.

Viper Energy is scheduled to report fourth-quarter results on Feb 22. The Zacks Consensus Estimate for Viper Energy’s earnings is pegged at 20 cents per unit, suggesting an improvement of 66.7% compared to the prior-year reported figure.

Royal Dutch Shell has an Earnings ESP of +0.96% and a Zacks Rank #1.

Royal Dutch Shell is scheduled to release fourth-quarter earnings on Feb 3. The Zacks Consensus Estimate for Royal Dutch Shell’s earnings is pegged at $1.39 per share, suggesting a massive year-over-year improvement.

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


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