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Zacks Investment Ideas feature highlights: CVR Energy and Valero Energy
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For Immediate Release
Chicago, IL – March 20, 2023 – Today, Zacks Investment Ideas feature highlights CVR Energy (CVI - Free Report) and Valero Energy (VLO - Free Report) .
With Crude Oil Under $70 per Barrel, Buy These Stocks on the Dip
With crude prices falling under $70 a barrel, investors may be eyeing opportunities among oil and energy stocks as the sector has largely outperformed the broader market over the last few years.
Here is a look at two Zacks Rank #1 (Strong Buy) Oils & Energy stocks that investors may want to consider as their earnings estimate revisions have trended higher despite crude oil prices declining.
CVR Energy
The Oil and Gas – Refining and Marketing Industry is currently in the top 7% of over 249 Zacks industries with CVR Energy standing out at the moment.
CVR is an independent refiner and marketer of high-value transportation fuels. In addition to its petroleum business which includes a crude oil gathering system, CVR also produces ammonia, urea ammonia nitrate fertilizers, and provides storage and terminal facilities for asphalt and refined fuels.
Not primarily reliant on crude oil prices, fiscal 2023 earnings estimate revisions have continued to trend higher for CVR in the last week. Earnings estimates have now soared 62% throughout the quarter for FY23 and 32% for FY24.
In addition to its Zacks Rank #1 (Strong Buy), CVR stock has an overall "A" VGM Style Scores grade for the combination of Value, Growth, and Momentum. CVR's valuation is attractive trading at $29 per share and 8.9X forward earnings.
This is slightly above the industry average of 6.1X but much more reasonable than its decade high and a discount to the median of 11.6X. Plus, CVR is still up +36% in the last year to largely outperform the S&P 500's -12% and the Oil Refining & Marketing Markets +11%.
Valero Energy
Another stock that stands out as it is not completely reliant on crude oil prices is Valero Energy. Also part of the top-rated Oil and Gas – Refining and Marketing Industry, Valero Energy is the largest independent refiner and marketer of petroleum products in the U.S. but is a leading ethanol producer as well.
Valero has over 14 ethanol plants in the Midwest that have a combined capacity of 1.73 billion gallons per year. More impressive, Valero's FY23 earnings estimates have jumped 30% over the last 90 days with FY24 estimates climbing 48%
Valero also has an overall "A" VGM grade with its valuation especially intriguing at current levels of $125 per share and just 5.2X forward earnings. This is much lower than its extreme decade-long high and a 55% discount to the median 11.7X with rising earnings estimates offering further support.
Even better, Valero stock is up +38% over the last year to easily top the S&P 500 and the Oil Refining & Marketing Market. Furthermore, over the last three years, Valero stock has skyrocketed +257% to also crush the benchmark and beat its Zack Sub-industry's +188%.
Takeaway
CVR Energy and Valero's attractive P/E valuations along with rising earnings estimates revisions is very intriguing and there could certainly be more upside in their stocks even as crude oil prices decline. While these companies are able to profit from higher oil prices they are not reliant on the global commodity and should continue to benefit from their diverse businesses.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: CVR Energy and Valero Energy
For Immediate Release
Chicago, IL – March 20, 2023 – Today, Zacks Investment Ideas feature highlights CVR Energy (CVI - Free Report) and Valero Energy (VLO - Free Report) .
With Crude Oil Under $70 per Barrel, Buy These Stocks on the Dip
With crude prices falling under $70 a barrel, investors may be eyeing opportunities among oil and energy stocks as the sector has largely outperformed the broader market over the last few years.
Here is a look at two Zacks Rank #1 (Strong Buy) Oils & Energy stocks that investors may want to consider as their earnings estimate revisions have trended higher despite crude oil prices declining.
CVR Energy
The Oil and Gas – Refining and Marketing Industry is currently in the top 7% of over 249 Zacks industries with CVR Energy standing out at the moment.
CVR is an independent refiner and marketer of high-value transportation fuels. In addition to its petroleum business which includes a crude oil gathering system, CVR also produces ammonia, urea ammonia nitrate fertilizers, and provides storage and terminal facilities for asphalt and refined fuels.
Not primarily reliant on crude oil prices, fiscal 2023 earnings estimate revisions have continued to trend higher for CVR in the last week. Earnings estimates have now soared 62% throughout the quarter for FY23 and 32% for FY24.
In addition to its Zacks Rank #1 (Strong Buy), CVR stock has an overall "A" VGM Style Scores grade for the combination of Value, Growth, and Momentum. CVR's valuation is attractive trading at $29 per share and 8.9X forward earnings.
This is slightly above the industry average of 6.1X but much more reasonable than its decade high and a discount to the median of 11.6X. Plus, CVR is still up +36% in the last year to largely outperform the S&P 500's -12% and the Oil Refining & Marketing Markets +11%.
Valero Energy
Another stock that stands out as it is not completely reliant on crude oil prices is Valero Energy. Also part of the top-rated Oil and Gas – Refining and Marketing Industry, Valero Energy is the largest independent refiner and marketer of petroleum products in the U.S. but is a leading ethanol producer as well.
Valero has over 14 ethanol plants in the Midwest that have a combined capacity of 1.73 billion gallons per year. More impressive, Valero's FY23 earnings estimates have jumped 30% over the last 90 days with FY24 estimates climbing 48%
Valero also has an overall "A" VGM grade with its valuation especially intriguing at current levels of $125 per share and just 5.2X forward earnings. This is much lower than its extreme decade-long high and a 55% discount to the median 11.7X with rising earnings estimates offering further support.
Even better, Valero stock is up +38% over the last year to easily top the S&P 500 and the Oil Refining & Marketing Market. Furthermore, over the last three years, Valero stock has skyrocketed +257% to also crush the benchmark and beat its Zack Sub-industry's +188%.
Takeaway
CVR Energy and Valero's attractive P/E valuations along with rising earnings estimates revisions is very intriguing and there could certainly be more upside in their stocks even as crude oil prices decline. While these companies are able to profit from higher oil prices they are not reliant on the global commodity and should continue to benefit from their diverse businesses.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.