Valero Energy logged a 1.2% change during today's afternoon session, and is now trading at a price of $133.53 per share.
Valero Energy returned gains of 8.2% last year, with its stock price reaching a high of $152.2 and a low of $104.18. Over the same period, the stock underperformed the S&P 500 index by -15.8%. As of April 2023, the company's 50-day average price was $126.12. Valero Energy Corporation manufactures, markets, and sells transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, Latin America, and internationally. Based in San Antonio, TX, the large-cap Energy company has 9,716 full time employees. Valero Energy has offered a 3.1% dividend yield over the last 12 months.
Exceptional EPS Growth at the Expense of a Highly Leveraged Balance Sheet:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $117,033 | $108,324 | $64,912 | $113,977 | $176,383 | $151,098 |
| Revenue Growth | n/a | -7.44% | -40.08% | 75.59% | 54.75% | -14.34% |
| Operating Margins | 4% | 4% | -2% | 2% | 9% | 10% |
| Net Margins | 3% | 3% | 0% | 1% | 7% | 7% |
| Net Income (MM) | $3,353 | $2,784 | $314 | $1,288 | $11,879 | $11,163 |
| Net Interest Expense (MM) | $470 | $454 | $563 | $603 | $562 | $580 |
| Depreciation & Amort. (MM) | $2,017 | $2,255 | $2,351 | $2,405 | $2,473 | $2,644 |
| Earnings Per Share | $7.29 | $5.84 | -$3.5 | $2.27 | $29.04 | $29.25 |
| EPS Growth | n/a | -19.89% | -159.93% | 164.86% | 1179.3% | 0.72% |
| Diluted Shares (MM) | 428 | 414 | 407 | 407 | 396 | 270 |
| Free Cash Flow (MM) | $3,018 | $4,616 | $948 | $5,859 | $12,574 | $12,086 |
| Current Ratio | 1.65 | 1.44 | 1.71 | 1.26 | 1.38 | 1.51 |
| Total Debt (MM) | $9,595 | $9,672 | $15,090 | $13,870 | $11,635 | $11,441 |
| Net Debt / EBITDA | 1.0 | 1.16 | 15.26 | 2.15 | 0.37 | 0.33 |
Valero Energy has growing revenues and no capital expenditures, exceptional EPS growth, and irregular cash flows. However, the firm suffers from weak operating margins with a positive growth rate and a highly leveraged balance sheet.
Valero Energy Is Reasonably Priced:
Valero Energy has a trailing twelve month P/E ratio of 4.3, compared to an average of 8.53 for the Energy sector. Based on its EPS guidance of $14.44, the company has a forward P/E ratio of 8.7. The 10.3% compound average growth rate of Valero Energy's historical and projected earnings per share yields a PEG ratio of 0.42. This suggests that its shares are undervalued. Additionally, the market is possibly undervaluing Valero Energy in terms of its equity because its P/B ratio is 1.75 whereas the sector average is 1.78. The company's shares are currently trading -46.9% below their Graham number.
There's an Analyst Consensus of Some Upside Potential for Valero Energy:
The 16 analysts following Valero Energy have set target prices ranging from $128.0 to $176.0 per share, for an average of $151.56 with a buy rating. As of April 2023, the company is trading -16.8% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Valero Energy has an average amount of shares sold short because 3.5% of the company's shares are sold short. Institutions own 80.9% of the company's shares, and the insider ownership rate stands at 0.48%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 10% stake in the company is worth $4,427,806,397.
