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Investing.com - Wells Fargo (NYSE:WFC) raised its price target on Valero Energy (NYSE:VLO), a prominent player in the Oil, Gas & Consumable Fuels industry with a market capitalization of $46.56 billion, to $168.00 from $151.00 on Wednesday, while maintaining an Overweight rating on the stock. Currently trading at $148.67, InvestingPro analysis suggests the stock is slightly undervalued.
The firm slightly lowered its Q2 2025 earnings estimate for the refiner to $1.90 per share from $1.92, primarily due to a higher tax rate. This reduction was partially offset by higher refining volumes and margins in the Gulf Coast and slightly better renewable diesel margin assumptions.
Wells Fargo’s full-year 2025 EPS estimate for Valero was adjusted to $6.65 from $6.67, while its ethanol estimates remained unchanged.
The price target increase reflects Wells Fargo’s decision to raise its refining multiple by 0.5x to 6.5x, citing strength in diesel crack spreads and increased visibility on wider crude differentials in 2026, based on OPEC+’s consistent volume increases.
The firm also raised its renewable diesel multiple by 1.0x to 10.0x, reflecting its view that this market segment has already bottomed out.
In other recent news, Valero Energy Corporation has been the focus of several significant developments. Goldman Sachs upgraded Valero’s stock rating from Neutral to Buy, raising the price target to $154 due to a reassessment of oil product demand and tighter crude differentials. The firm anticipates an increase in earnings per share from approximately $7.50 this year to over $12.50 by 2027, driven by share repurchases and improving crude differentials. UBS also raised its price target for Valero to $164, maintaining a Buy rating, and adjusted its second-quarter 2025 earnings estimate, citing positive refining performance. Meanwhile, Evercore ISI initiated coverage of Valero with an In Line rating and a $135 price target, highlighting the company’s operational strengths and competitive positioning.
In other corporate news, Valero announced board changes following its annual stockholders’ meeting, including the retirement of director Robert A. Profusek and the re-election of non-employee directors. Stockholders approved the 2024 executive compensation and ratified KPMG LLP as the independent auditor for 2025. Additionally, a previous downgrade by Goldman Sachs from Sell to Neutral included a revised price target of $127, reflecting a more favorable crude environment and a constructive supply outlook. These recent developments provide a comprehensive view of Valero Energy’s current standing and strategic direction.
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