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Valero Energy (VLO) Sees a More Significant Dip Than Broader Market: Some Facts to Know

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Valero Energy (VLO - Free Report) ended the recent trading session at $133.05, demonstrating a -0.76% swing from the preceding day's closing price. This change lagged the S&P 500's 0.19% loss on the day. Elsewhere, the Dow saw a downswing of 0.55%, while the tech-heavy Nasdaq depreciated by 0.18%.

The oil refiner's stock has dropped by 3.35% in the past month, falling short of the Oils-Energy sector's gain of 3.07% and the S&P 500's gain of 6.66%.

Analysts and investors alike will be keeping a close eye on the performance of Valero Energy in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.77, signifying a 78.31% drop compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $31.07 billion, down 12.27% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $8.92 per share and revenue of $131.18 billion, which would represent changes of -64.18% and -9.38%, respectively, from the prior year.

Investors should also take note of any recent adjustments 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.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 3.15% lower. Valero Energy is currently a Zacks Rank #3 (Hold).

From a valuation perspective, Valero Energy is currently exchanging hands at a Forward P/E ratio of 15.03. Its industry sports an average Forward P/E of 15.94, so one might conclude that Valero Energy is trading at a discount comparatively.

We can additionally observe that VLO currently boasts a PEG ratio of 2.5. 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 2.5 at yesterday's closing price.

The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector. With its current Zacks Industry Rank of 204, this industry ranks in the bottom 19% of all industries, numbering over 250.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow VLO in the coming trading sessions, be sure to utilize Zacks.com.


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