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Valero Energy (VLO) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Valero Energy (VLO - Free Report) closed at $118.86, marking a -1.74% move from the previous day. This move lagged the S&P 500's daily loss of 1.44%. Elsewhere, the Dow lost 1.03%, while the tech-heavy Nasdaq lost 0.2%.

Heading into today, shares of the oil refiner had lost 8.21% over the past month, lagging the Oils-Energy sector's loss of 2.49% and the S&P 500's gain of 6.22% in that time.

Valero Energy will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $7.53, up 204.86% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $40.13 billion, up 11.78% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $28.25 per share and revenue of $174.77 billion. These totals would mark changes of +905.34% and +53.34%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Valero Energy. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 1.74% higher within the past month. Valero Energy is currently a Zacks Rank #2 (Buy).

In terms of valuation, Valero Energy is currently trading at a Forward P/E ratio of 4.28. For comparison, its industry has an average Forward P/E of 5.14, which means Valero Energy is trading at a discount to the group.

Also, we should mention that VLO has a PEG ratio of 0.71. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Oil and Gas - Refining and Marketing was holding an average PEG ratio of 0.46 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 30, putting it in the top 12% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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