Valero Energy Faces Earnings Challenge Amid Sector Struggles

Valero Energy's upcoming earnings release is under scrutiny as projections show a significant decline in both EPS and revenue. With recent stock performance lagging behind industry peers and the S&P 500, investor sentiment may be cautious leading up to the report.

Date: 17-09-2024

AI Rating: 4

Valero Energy (VLO) is gearing up for its earnings report on October 24, 2024. The anticipated earnings per share (EPS) is projected at $2.65, reflecting a troubling 64.62% decrease compared to the same quarter last year. This sharp decline could negatively impact investor sentiment, as it indicates potential challenges in profitability.

Additionally, the revenue forecast of $33.88 billion marks an 11.77% downturn from the previous year's quarter. The overall annual estimates are also grim, with total earnings expected to drop to $12.30 per share, highlighting a staggering 50.6% drop year-over-year. Such downward trends in both EPS and revenue can raise concerns over the company's financial health and future growth prospects.

Looking at its stock performance, Valero has experienced a 10.39% decrease in the past month, which is significantly worse than the 2.9% loss in its sector and a stark contrast to the 3.67% gain of the S&P 500. This underperformance indicates potential weakness in the company's market position.

The Zacks Rank system currently rates Valero at #3 (Hold), suggesting a cautious outlook. With the Forward P/E ratio of 10.92 being below the industry average of 13.68, this might suggest that the stock is undervalued, but such a valuation must be weighed against the falling earnings and revenue expectations.

Valero's PEG ratio stands at 2.73, which aligns with industry metrics. However, the declining earnings growth may contribute to a lukewarm investor perception. Overall, the performance of Valero Energy heading into its earnings report appears apprehensive, supported by significant anticipated declines in key financial indicators.

Stocks: VLO