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

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Valero Energy (VLO - Free Report) closed at $78.13 in the latest trading session, marking a +1.75% move from the prior day. This move outpaced the S&P 500's daily gain of 0.09%. Elsewhere, the Dow gained 0.26%, while the tech-heavy Nasdaq lost 0.17%.

Prior to today's trading, shares of the oil refiner had lost 2.5% over the past month. This has lagged the Oils-Energy sector's gain of 0.47% and the S&P 500's gain of 4.92% in that time.

Wall Street will be looking for positivity from VLO as it approaches its next earnings report date. The company is expected to report EPS of $1.73, down 13.93% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $27.08 billion, down 12.22% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.99 per share and revenue of $107.60 billion, which would represent changes of -32.29% and -8.06%, respectively, from the prior year.

Any recent changes to analyst estimates for VLO should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 6.54% lower. VLO is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note VLO's current valuation metrics, including its Forward P/E ratio of 15.39. This represents a discount compared to its industry's average Forward P/E of 15.99.

It is also worth noting that VLO currently has a PEG ratio of 1.92. 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 2.09 at yesterday's closing price.

The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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