Valero Energy Faces Earnings Decline Ahead of Key Report

In light of the latest report, Valero Energy is expected to post a significant decrease in EPS and revenue, which could negatively impact its stock performance. Investors are closely watching for changes in analyst forecasts as the earnings report date approaches.

Date: 11-09-2024

AI Rating: 4

Valero Energy (VLO) has experienced a notable stock price movement with a +1.44% increase, but this comes after a troubling month where the stock fell by 11.44%. The upcoming earnings report, scheduled for October 24, 2024, is critical for investors as it is projected to reveal earnings per share (EPS) of $2.65. This is a significant 64.62% decrease from the same quarter last year, which is likely to be perceived negatively by the market. In addition, revenue is anticipated to drop to $33.88 billion, representing an 11.77% decline compared to last year.

The full fiscal year outlook is equally concerning, with Zacks Consensus Estimates predicting an annual EPS of $12.30 and a total revenue of $133.25 billion, indicating a dramatic fall of -50.6% and -7.96%, respectively. Such projections often lead to reduced investor confidence and could result in downward pressure on the stock price.

Moreover, analyst estimate revisions are critical, as the consensus EPS forecast has already moved 1.19% lower in the past 30 days. Valero's current Zacks Rank of #3 (Hold) reflects a neutral outlook but lacks any positive momentum that might boost investor sentiment. It is also noteworthy that Valero holds a Forward P/E ratio of 10.91, a valuation which is below the industry average of 13.72, pointing towards a potentially undervalued position but also might reflect underlying business concerns.

Furthermore, the low PEG ratio of 2.73 compared to the industry's 2.31 could illustrate significant challenges regarding valuation versus growth potential. The entire Oil and Gas - Refining and Marketing industry carries a Zacks Industry Rank of 169, placing it in the bottom 34% of all sectors, thereby indicating a broader industry struggle.

Stocks: VLO