Fri, Feb. 13, 11:18 AM
- All oil refiners are not the same, Goldman Sachs suggests as it upgrades Valero Energy (VLO +4%) to Buy from Neutral and adds it to the firm's Conviction Buy List while downgrading Tesoro (TSO -0.4%) to Neutral from Buy and removing it from the conviction list.
- Goldman thinks VLO offers investors a compelling turnaround story - similar to TSO in 2014 - with a clear, new strategy to reduce growth capex and return capital to shareholders; VLO also has not been impacted by USW strikes, unlike TSO.
- The firm also expect VLO to be as aggressive as any refiner in dropping down assets to its underlying Valero Energy Partners (NYSE:VLP) MLP, and feels the market generally has underappreciated this potential upside.
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.
Aug. 18, 2014, 3:25 PM
- Valero Energy (VLO +2.3%) has dropped 3% during the past three months and has underperformed its closest peers Marathon Petroleum (MPC +1.6%) and Phillips 66 (PSX +2.1%), but Morgan Stanley’s Evan Calio and Manav Gupta think it’s time for a turnaround.
- While MPC, PSX and Exxon Mobil (XOM +0.2%) have major planned turnaround scheduled for Q4, VLO will be operating at a meaningfully higher utilization rate and is best positioned to capture any widening Gulf Coast differentials resulting from high turnaround activity, the analysts say.
- In addition to VLO's Q4 earnings revision upside, the firm estimate VLO has $800M in MLP-able EBITDA, including organic growth projects, which can be dropped into Valero Energy Partners (VLP +0.7%) in the foreseeable future.
Jan. 9, 2014, 11:57 AM
- Valero Energy's (VLO +2%) price target is raised to $49 from $41 at Imperial Capital, which predicts a strong Q4 report coming.
- "Due to improved crude price differentials, and thus expectations of refinery throughput at the top of management’s guidance, we estimate that VLO will report adjusted 4Q13 income of $0.97, up from our previous $0.60 estimate," when VLO reports Q4 earnings Jan. 29.
- During Q4, VLO successfully completed the IPO of Valero Energy Partners (VLP), its logistics-focused MLP.
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