Valero Energy (VLO) Increases Despite Market Slip: Here's What You Need to Know

Valero Energy (VLO) closed at $217.71 in the latest trading session, marking a +1.3% move from the prior day. The stock exceeded the S&P 500, which registered a loss of 0.94% for the day. Meanwhile, the Dow experienced a drop of 0.83%, and the technology-dominated Nasdaq saw a decrease of 1.02%.

Shares of the oil refiner have appreciated by 19.25% over the course of the past month, outperforming the Oils-Energy sector's gain of 12.58%, and the S&P 500's loss of 1.3%.

The investment community will be closely monitoring the performance of Valero Energy in its forthcoming earnings report. The company is expected to report EPS of $1.86, up 108.99% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $27.85 billion, showing a 7.97% drop compared to the year-ago quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $12.65 per share and a revenue of $112.89 billion, representing changes of +19.23% and -7.98%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Valero Energy. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been a 1.13% rise in the Zacks Consensus EPS estimate. Valero Energy currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Valero Energy is currently trading at a Forward P/E ratio of 16.98. This signifies a premium in comparison to the average Forward P/E of 15.79 for its industry.

Also, we should mention that VLO has a PEG ratio of 1.12. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Oil and Gas - Refining and Marketing industry currently had an average PEG ratio of 1.36 as of yesterday's close.

The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector. Currently, this industry holds a Zacks Industry Rank of 221, positioning it in the bottom 10% 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.

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

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This article originally published on Zacks Investment Research (zacks.com).

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