Valero Energy stock rating upgraded to Buy at BofA on wider crude spreads

Investing.com - BofA Securities upgraded Valero Energy (NYSE:VLO) from Neutral to Buy on Wednesday, while raising its price target to $179.00 from $152.00. The stock, currently trading at $154.28 with a market capitalization of $47.8 billion, has shown strong momentum, trading near its 52-week high of $155.12. According to InvestingPro data, the company maintains a "GOOD" financial health score.

The upgrade reflects BofA’s view that Valero is better positioned now than when the firm initiated coverage last fall, primarily due to an improved light-heavy crude oil outlook. This optimistic stance is supported by eight analysts recently revising their earnings estimates upward, as revealed by InvestingPro analysis.

BofA anticipates a $1.50 per barrel widening in the heavy/sour discount on the ASCI sour crude index, along with $1.50-3.00 per barrel widening in other heavy/sour differentials.

Based on these projections, BofA has raised its EBITDA estimates for Valero for 2026 and 2027 to approximately 10% above consensus forecasts.

The new price target of $179 represents potential upside of about 20% for the refining company’s shares.

In other recent news, Valero Energy Corporation reported stronger-than-expected earnings for the second quarter of 2025. The company achieved an earnings per share of $2.28, surpassing the forecast of $1.76. Revenue also exceeded expectations, reaching $29.89 billion compared to the anticipated $27.97 billion. Despite these positive financial results, investor concerns over operational challenges were noted. Additionally, Raymond James adjusted its price target for Valero Energy, lowering it slightly to $170 while maintaining a Strong Buy rating. The firm expressed confidence in Valero’s ability to benefit from favorable long-term refining conditions in the U.S., despite a complex macroeconomic environment. Furthermore, Goldman Sachs added Valero Energy to its Directors Cut conviction list for September, highlighting it as one of their top investment ideas. These developments reflect ongoing interest and analysis from major investment firms regarding Valero Energy’s market position.

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