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Valero Energy Corporation (VLO)

  • Fri, Jan. 30, 12:54 PM
    • Valero Energy Partners (VLP +1.7%) is upgraded to Outperform from Neutral with a $57 price target at Credit Suisse, which notes that parent Valero Energy (VLO +0.9%) plans to drop down $1B worth of assets into VLP, perhaps carrying EBITDA of ~$100M.
    • Credit Suisse says the total is well above the level of dropdowns it had expected; the firm now expects VLP to grow distributions 25% in 2015, with similar growth continuing through 2017 and at 20% through 2020.
    | Fri, Jan. 30, 12:54 PM | 3 Comments
  • Thu, Jan. 29, 2:57 PM
    • Valero Energy (VLO +0.4%) is modestly higher following better than expected Q4 earnings as higher product margins helped offset lower oil prices.
    • Q4 refining segment throughput volumes averaged 2.8M bbl/day in the quarter, a Y/Y increase of 41K bbl/day from a year earlier, and operating income in the unit grew to $1.9B from $1.5B - 20% higher than forecast - as assets performed at 98% utilization and refining margins outperformed estimates by more than $1/bbl in all four operating regions.
    • In the ethanol segment, operating income fell 49% Y/Y to $158M but that was ~50% better than expected due to higher margins and throughput.
    • Says it is targeting an estimated $1B of dropdown transactions to Valero Energy Partners (NYSE:VLP) in 2015.
    • Cowen analysts say VLO turned lemons into lemonade in the quarter, and expects domestic demand improvement in 2015 as a result of lower prices to provide additional earnings support.
    • It's worth noting that VLO has an advantage over many rivals because it processes heavy crude from Canada and Mexico, which is even cheaper than the benchmark U.S. oil price.
    | Thu, Jan. 29, 2:57 PM | 13 Comments
  • Thu, Jan. 29, 7:41 AM
    • Valero Energy (NYSE:VLO): Q4 EPS of $1.83 beats by $0.51.
    • Revenue of $27.86B (-19.1% Y/Y) beats by $1.01B.
    • Press Release
    | Thu, Jan. 29, 7:41 AM | 5 Comments
  • Tue, Jan. 27, 6:52 PM
    • Few energy plays have held up as well of late as U.S. refiners such as Valero (NYSE:VLO), Tesoro (NYSE:TSO) and Marathon Petroleum (NYSE:MPC), and Barclays analysts see more strength ahead for the group.
    • For a refiner the price of oil is an input, so cheaper oil cuts its costs, and U.S. refiners generally do better when the price difference between U.S. crude and international benchmarks is widening - and that’s exactly what Barclays believes will happen.
    • Brent-LLS and Brent-WTI Cushing spreads have tightened significantly in recent weeks, but the firm thinks the differentials are unsustainable; storage capacity at Cushing and the Gulf coast will inhibit the ability to store excess barrels indefinitely, and the upcoming turnaround season should expedite the speed at which Cushing and Gulf coast inventory meets maximum storage capacity, eventually forcing differentials to re-widen and begin to reflect transportation costs.
    • In conclusion, Barclays believes U.S. independent refiners will benefit from the re-widening of North American differentials in the coming months.
    | Tue, Jan. 27, 6:52 PM | 10 Comments
  • Fri, Jan. 23, 1:54 PM
    • Valero Energy (NYSE:VLO) declares $0.40/share quarterly dividend, 45.5% increase from prior dividend of $0.28.
    • Forward yield 3.24%
    • Payable March 3; for shareholders of record Feb. 11; ex-div Feb. 9.
    | Fri, Jan. 23, 1:54 PM | 15 Comments
  • Tue, Jan. 20, 8:45 PM
    • Venezuela’s Citgo Petroleum reportedly has called off its sale process and instead plans a debt sale to raise $2.5B for the cash-strapped country.
    • The U.S. oil refining and marketing unit of PdVSA, which operates three oil refineries with a combined 760K bbl/day in processing capacity as well as networks of pipelines and fuel distribution terminals in the eastern U.S., was expected to fetch $8B-$11B in a sale, but plunging crude oil prices have pressured the country, which already had been facing cash flow problems, making a debt sale more attractive as a quicker source of cash.
    • The Citgo auction drew interest from U.S. refiners Marathon Petroleum (NYSE:MPC), HollyFrontier (NYSE:HFC) and Valero Energy (NYSE:VLO) as well as P-E firms.
    | Tue, Jan. 20, 8:45 PM | 4 Comments
  • Tue, Jan. 13, 10:29 AM
    • Valero Energy (VLO +0.7%) is upgraded to Overweight from Neutral with a $56 price target, up from $54, at J.P. Morgan, which makes VLO its top pick among oil refiners on expectations for strong Q4 results and an improved outlook for the full year.
    • JPM analyst Phil Gresh says VLO should benefit from the recent widening in the spread between heavy and light differentials, at a time when valuation has improved.
    • Meanwhile, the firm downgrades Marathon Petroleum (MPC -0.1%)to Neutral from Outperform with a $97 price target, reduced from $104, citing what it sees a "frothy" investor sentiment.
    | Tue, Jan. 13, 10:29 AM | 5 Comments
  • Wed, Jan. 7, 7:35 PM
    • Energy bonds have become one of the riskiest sectors in the bond market, as the cost of buying five-year credit default swaps protecting $10M of bonds has jumped from $139K/year last June to $377K today for companies in the S&P/ISDA CDS U.S. Energy Select 10 Index.
    • The index consists of 10 large major energy companies: APC, APA, CHK, COP, DVN, OTCQB:FSTO, HAL, BTU, VLO and WMB.
    • Even though most of the companies boast investment-grade ratings, it now costs more to insure bonds in that index against default than it costs to insure bonds of an average junk-rated company, according to S&P.
    | Wed, Jan. 7, 7:35 PM | 5 Comments
  • Dec. 20, 2014, 10:20 AM
    • With crude oil prices near five-year lows, some analysts say gas stations may be the best way to play the energy sector right now, with CST Brands (NYSE:CST), Murphy USA (NYSE:MUSA) and Marathon Petroleum (NYSE:MPC) as pure plays worth watching.
    • Gasoline retailers enjoy their largest profit margins in falling price environments such as today, says Again Capital's John Kilduff.
    • The gas station trend is clearly seen with refinery Valero's (NYSE:VLO) 2013 spinoff of its retail CST Brands, which operates 1,900 gas stations in North America and whose stock has easily outperformed VLO in recent months; Gabelli last week increased its 2014 EPS estimate on CST because of lower oil prices.
    • MUSA and MPC, also created as gas station spinoffs from refineries, have outperformed their parent companies as well.
    • Tesoro (NYSE:TSO) said its retail segment enjoyed record performance in the most recent quarter, while big box stores such as Costco (NASDAQ:COST) that have gas stations connected to their stores also noted the benefit of lower oil prices in their earnings reports.
    | Dec. 20, 2014, 10:20 AM | 23 Comments
  • Dec. 18, 2014, 12:54 PM
    • Phillips 66 (PSX -0.2%) is upgraded to Buy from Hold while fellow refiner Valero Energy (VLO -2.2%) is downgraded to Hold from Buy at Deutsche Bank.
    • On PSX, the firm notes that fears of margin pressure on the CPChem and DCP segments are somewhat warranted given the oil price backdrop, but still thinks shares are pricing in a fairly draconian scenario as investors overstate PSX’s exposure; on its sum-of-the-parts analysis, the firm thinks investors are getting the refiner segment essentially for free.
    • Deutsche Bank cites valuation and its more cautious view on the sector in its VLO downgrade, as concerns around persistent weakness in Gulf coast refining margins coupled with currently narrow WTI-Brent differentials keep it on the sidelines for now.
    | Dec. 18, 2014, 12:54 PM | 10 Comments
  • Dec. 15, 2014, 12:33 PM
    • BofA Merrill analyst Doug Leggate stays cautious on the refining sector for 2015, although he sees a bullish opportunity in Phillips 66 (PSX +0.5%), which he upgrades to Buy from Neutral with a $90 price target.
    • The expected recognition of value risks being materially overhyped compared to what is currently being recognized by MLPs, the analyst says, adding that absence of guidance on the cost impact on the remaining business, limited guidance on tax and lack of precision on disclosure prompts skepticism that the market is not getting ahead of itself.
    • Leggate downgrades HollyFrontier (HFC -1.5%) to Neutral from Buy, and PBF Energy (PBF -1.9%) and Delek US (DK -1.9%) to Underperform from Neutral; he also lowers stock price targets for the three, as well as for Valero (VLO +0.4%), Northern Tier (NTI -2.5%) and Marathon Petroleum (MPC -1.1%).
    | Dec. 15, 2014, 12:33 PM | 25 Comments
  • Dec. 3, 2014, 3:15 PM
    • U.S. oil refiners are processing record amounts of crude for this time of year, FT reports, taking advantage of falling oil prices and a flood of supply from shale drillers.
    • Refiners’ appetite has kept the price of high-quality light U.S. crude closely in line with international prices, defying warnings that a glut would force deep discounts: “The bottom line remains that we haven’t seen an oversupply of light crude,” Marathon Petroleum (MPC +1.5%) says.
    • Whether U.S. refineries succeed in absorbing the rising oil tide is up for speculation, but the refiners' own investment plans suggest they have the capacity to handle rising volumes; Valero (VLO +1.4%), for example, plans to add crude units in Houston and Corpus Christi designed to process oil from the nearby Eagle Ford shale.
    • Refiners are by far the dominant customers for crude, so the amount purchased by U.S. refiners will be an important guide for world oil markets.
    • Also: TSO +0.1%, ALJ +0.5%, PSX +1.6%, WNR +1.2%, HFC +0.4%, CVI +0.8%, PBF +1.8%.
    | Dec. 3, 2014, 3:15 PM | 12 Comments
  • Dec. 2, 2014, 5:58 PM
    • U.S. ethanol production is likely to continue at a record rate despite its rare premium to gasoline, as cheap corn, high biofuel prices and even cool weather provide ideal conditions and strong profit margins.
    • "The mentality is that everyone is running," says Todd Becker, CEO of Green Plains (NASDAQ:GPRE), the no. 4 U.S. ethanol producer behind Archer Daniels Midland (NYSE:ADM), POET LLC and Valero Energy (NYSE:VLO).
    • Export demand for ethanol is booming, up more than 40% YTD, helping to make ethanol more expensive than gasoline in some domestic markets; meanwhile, costs to make ethanol have declined in the wake of a record U.S. harvest of corn, of which about a third is used for ethanol.
    • However, ethanol futures are trading at a $0.30 premium to gasoline futures, the second largest in the last five years; if the disparity persists, ethanol demand from fuel blenders could slip.
    | Dec. 2, 2014, 5:58 PM | 7 Comments
  • Dec. 2, 2014, 2:48 PM
    • Energy stocks (XLE +1.4%) are posting the day's largest gains among S&P sectors, rebounding from recent losses even as Nymex crude oil fell another $2.05 to $66.97/bbl.
    • Refiners Marathon Petroleum (MPC +4%) and Valero (VLO +4.1%) and pipeline operator Williams Cos. (WMB +1.5%) are among the top gainers, while losers include most oil services companies such as Halliburton (HAL -2.2%) and rig operator Transocean (RIG -3.7%).
    • Anadarko Petroleum (APC +1.6%), Cimarex Energy (XEC +1%), Devon Energy (DVN +0.7%), EOG Resources (EOG +3.8%) and Marathon Oil (MRO +3.5%) were selected top “safe haven” picks for analysts at Tudor Pickering Holt, which said they are “liquid names with high-quality assets and healthy balance sheets."
    | Dec. 2, 2014, 2:48 PM | Comment!
  • Nov. 21, 2014, 6:45 PM
    | Nov. 21, 2014, 6:45 PM | 46 Comments
  • Nov. 21, 2014, 10:28 AM
    | Nov. 21, 2014, 10:28 AM | 37 Comments
Company Description
Valero Energy Corp is a refining and marketing company. The Company produces conventional gasolines, distillates, jet fuel, asphalt, petrochemicals, lubricants, and other refined products as well as a slate of premium products.