Why Valero Energy Corporation (NYSE: VLO) Stock Might Be A Good Investment

Valero Energy Corporation (NYSE:VLO) traded at $126.34 at last check on Tuesday, April 18, made a downward move of -1.53% on its previous day’s price.

Looking at the stock we see that its previous close was $128.30 and the beta (5Y monthly) reads 1.66 with the day’s price range being $127.59 – $130.77. The company has a trailing 12-month PE ratio of 4.41. In terms of its 52-week price range, VLO has a high of $150.39 and a low of $96.71. The company’s stock has lost about -0.02% over that past 30 days.

Valero Energy Corporation has a market cap of $47.65 billion and is expected to release its quarterly earnings report on Apr 27, 2023. With its Forward Dividend at 4.08 and a yield of 3.18%, the company’s investors could be anxious for the VLO stock to gain ahead of the earnings release. Estimates by analysts give the company expected earnings per share (EPS) of $7.07, with the EPS growth for the year raised at $24.03 for 2023 and $16.04 for next year. These figures represent -17.60% and -33.30% growth in EPS for the two years respectively.

Analysts tracking the company’s growth have also given it a consensus growth in revenue estimated at $34.93 billion, with a low of $31.59 billion and a high of $36.19 billion. The median projection represents growth adding up to -9.40% compared to sales growth for the corresponding quarter a year ago. According to analyst consensus estimates figures, the company’s yearly revenue forecast for 2023 is expected to hit $151.41 billion, or -14.20% down from figures reported last year.

There have been no upward and no downward revisions for the stock’s EPS in last 7 days, something that reflects the nature of company’s price movement in short term. On the other hand, looking at the outlook for the VLO stock, short term indicators assign the stock an average of Hold, while medium term indicators assign it an average of 50% Buy. Long term indicators on average place the stock in the category of Hold.

Based on estimates by 23 analysts, where scores have ranged from 1.00 for a strong buy to 5.00 for a strong sell, 6 have rated the Valero Energy Corporation (VLO) stock as a Hold, while 14 rate it as a Buy. 2 analyst(s) rate it as overweight while 0 of them rated it as underweight, whereas 1 suggest the stock as a Sell. The stock has an overall rating of Overweight and investors could take advantage and scoop up stock of the company.

Looking further, we note the current price level is -5.24% off its SMA20 and -5.34% from its 50-day simple moving average. The RSI (14) is pointing at 40.97 while the volatility over the past week is 2.52% and jumps to 3.47% over the past one month. The beta value is 1.66, while the average true range (ATR) is currently pointing at 4.73. The average price target for the stock over the next 12 months is $158.89, with the estimates having a low of $127.00 and a high of $188.00. These price ends are -0.52% and -48.8% off the today’s price level respectively, although investors could be excited at the prospect of a -28.62% if the VLO share price touches on the median price of $162.50.

Let’s briefly compare Valero Energy Corporation (VLO) stock to its peers. We find that today’s price change of -1.53% and 20.48% over the past 12 months for VLO competes that of Exxon Mobil Corporation (XOM), which has seen its stock price rise 0.51% in the latest trading session and is 31.25% over the last one year. Another of its peers Chevron Corporation (CVX) has gained 0.12% today, and was -0.27% down over the past year. Valero Energy Corporation has a P/E ratio of 4.41 compared to Exxon Mobil Corporation’s 8.64 and Chevron Corporation’s 9.36. In contrast to these companies, both the S&P 500 Index and the Dow Jones Industrial are today at -0.22% and -0.56%, respectively, in early deals.

Coming back to Valero Energy Corporation (NYSE:VLO), we note that the average 3-month trading volume was 4.29 million, while that of the preceding 10-day period stands at 4.35 million. Current shares outstanding are 380.00 million.

The insiders hold 0.20% of the company’s shares while institutions hold 82.50%. The data shows that short shares as of Mar 30, 2023, stood at 10.18 million at a short ratio of 2.02. This represents a 2.77% short interest in shares outstanding on Mar 30, 2023. Shares short fall in March from the previous month at 11.29 million. Investors should be excited about this stock as its upside potential is great, with today’s price pushing the stock -0.41% down in year-to-date price movement.