OpenAI seeks government backing for AI chip investments
Investing.com - Piper Sandler maintained its Overweight rating and $201.00 price target on Valero Energy (NYSE:VLO) on Monday.
The research firm acknowledged that while refining stocks appear expensive on traditional valuation multiples, it believes this is the wrong approach for evaluating Valero in the current market environment.
Piper Sandler highlighted several factors that differentiate Valero from historical comparisons, including its stronger balance sheet, improved earnings resilience, sustainable shareholder returns, and evolving supply/demand dynamics.
The firm emphasized that the investment case for oil and gas companies today centers on cash return to shareholders, noting that Valero offers an attractive free cash flow yield of 8.5%-10% projected for 2026.
This FCF yield compares favorably to other premium large-cap energy names, which Piper Sandler indicated are trading at 5.5%-7% FCF yields, making Valero relatively attractive on an absolute basis despite concerns about traditional valuation metrics.
In other recent news, Valero Energy Corporation reported robust financial results for the third quarter of 2025, significantly surpassing analysts’ expectations. The company achieved earnings per share of $3.66, compared to the forecasted $3.04, and exceeded revenue projections with $32.17 billion against the expected $30.67 billion. Piper Sandler responded to these strong earnings by raising Valero’s stock price target to $201, maintaining an Overweight rating. UBS also reiterated its Buy rating on Valero, highlighting the company’s strong regional refining guidance and operational outlook.
Additionally, Valero Energy declared a regular quarterly cash dividend of $1.13 per share, payable on December 18, 2025. The company also announced a leadership change, with Homer Bhullar set to succeed Jason Fraser as Chief Financial Officer effective January 1, 2026. Fraser will retire at the end of 2025. These developments reflect a period of positive momentum for Valero Energy, supported by strong financial performance and strategic leadership transitions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.