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Investing.com - UBS raised its price target on Valero Energy (NYSE:VLO), a prominent player in the Oil, Gas & Consumable Fuels industry with a market capitalization of $46.13 billion, to $164.00 from $150.00 on Tuesday, while maintaining a Buy rating on the stock. According to InvestingPro data, the company’s stock is currently trading at $147.26, with analysts’ targets ranging from $118 to $166.
The investment bank adjusted its second-quarter 2025 earnings per share estimate to $1.85 from $1.77, compared to the Street consensus of $1.94. UBS noted that its estimate includes $100 million in accelerated depreciation associated with the Benicia Refinery closure.
Without the accelerated depreciation, UBS calculated that Valero’s "clean EPS" would be $2.05, though it remains unclear whether the consensus estimate has factored in this depreciation expense.
UBS attributed the majority of its upward revisions to positive refining performance compared to prior expectations. The firm is modeling share buybacks of $350 million for the quarter.
The analysts noted that the second quarter was a "heavy turnaround quarter" for Valero, and they expect utilization to improve in the third quarter of 2025, with capture rates also likely to improve in the second half of 2025 as quality discounts widen.
In other recent news, Valero Energy Corporation reported its first-quarter 2025 financial results, surpassing earnings expectations with an adjusted earnings per share (EPS) of $0.89, compared to the anticipated $0.40. This performance was driven by strong margin capture in the Gulf and West Coast regions, although the company’s ethanol and Diamond Green Diesel segments faced challenges due to higher operational expenses and lower margins, respectively. Additionally, Goldman Sachs upgraded Valero’s stock rating from Neutral to Buy, raising the price target to $154, citing a positive outlook on earnings potential and improved crude differentials. Analysts from Raymond (NSE:RYMD) James also expressed confidence in Valero’s strategic positioning, maintaining a Strong Buy rating despite adjusting the stock’s price target from $155 to $150. They highlighted Valero’s advantageous position in the refining sector and growth prospects in renewable diesel and sustainable aviation fuel markets.
Furthermore, Evercore ISI initiated coverage of Valero with an In Line rating, projecting stable earnings power of $7-10 per share through 2025-2027 and a 6-7% average free cash flow yield. The firm emphasized Valero’s operational excellence and competitive edge in the refining market. In corporate governance news, Valero announced the retirement of director Robert A. Profusek and the re-election of non-employee directors following its annual stockholders’ meeting. Stockholders also approved executive compensation and ratified KPMG LLP as the independent auditor for 2025. These developments underscore Valero’s ongoing efforts to maintain a strong financial position and deliver shareholder value amidst a dynamic energy landscape.
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