Valero Energy stock rating reiterated at Buy by UBS on strong outlook

Investing.com - UBS has reiterated its Buy rating on Valero Energy (NYSE:VLO) with a price target of $183.00, citing the company’s regional refining guidance and operational outlook. The stock, currently trading at $173.70 and near its 52-week high of $178.43, has demonstrated strong momentum with a 41.5% return over the past six months. According to InvestingPro analysis, Valero maintains a "GOOD" overall financial health score.

The energy company provided specific throughput guidance across its refining network for the fourth quarter of 2025, with Gulf Coast operations expected to process 1.78-1.83 million barrels per day, Mid-Continent facilities at 420-440 thousand barrels per day, North Atlantic at 485-505 thousand barrels per day, and West Coast at 240-260 thousand barrels per day. The company, with its $54.15 billion market capitalization, maintains strong liquidity with a current ratio of 1.62.

Valero anticipates refining cash operating expenses of approximately $4.80 per barrel for the fourth quarter of 2025, according to UBS’s research note.

The company expects sour crude differentials to widen with increased production from OPEC+ nations and Canada, potentially benefiting its refining margins.

For its crude slate, Valero plans to process both Basrah and Kirkuk crudes in its refining system during the fourth quarter of 2025, while maintaining its position that waterborne movements offer more flexibility than pipeline commitments for West Coast supply, leading to its decision not to participate in new West-to-East product pipelines.

In other recent news, Valero Energy reported robust financial results for the third quarter of 2025, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $3.66, which exceeded the forecasted $3.04. Additionally, Valero’s revenue reached $32.17 billion, outperforming the anticipated $30.67 billion. Piper Sandler responded to these strong earnings by raising Valero Energy’s stock price target to $201, maintaining an Overweight rating. The firm’s earnings per share notably surpassed Piper Sandler’s own estimate of $3.06 and the Street consensus of $3.05. These developments highlight Valero’s strong refining results, which contributed to the better-than-expected financial performance. Investors showed positive sentiment as the company’s earnings announcement led to a notable pre-market trading response.

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