Valero Energy Faces Earnings Decline Amid Market Oscillation

Valero Energy's upcoming earnings release predicts a substantial drop in earnings per share and revenue, signaling investor caution. The company's current Zacks Rank is #5 (Strong Sell), indicating a negative outlook heading into the market period.

Date: 08-10-2024

AI Rating: 4

Valero Energy (VLO) has seen a modest increase of 1.1% in its stock price recently, outperforming the broader market indexes like the S&P 500, Dow, and Nasdaq, which have all experienced losses. Despite this short-term gain, investors are cautioned about the expected financial results due to be announced on October 24, 2024.

According to the report, Valero is projected to report earnings of $1.77 per share, indicating a significant year-over-year decline of 76.37%. Furthermore, revenue expectations stand at $33.31 billion, down 13.27% from the prior year. Over the full year, anticipated earnings are $9.85 per share and revenue of $130.65 billion, reflecting changes of -60.44% and -9.75%, respectively. These sharp declines in earnings and revenue highlight a concerning trend and may lead to negative investor sentiment, thus potentially impacting stock prices adversely.

The revisions in estimates are another critical aspect to monitor; recent adjustments have moved the EPS estimate 19.92% lower, leading to Valero holding a Zacks Rank of #5 (Strong Sell). This rating signals a bleak forecast for the company's performance, which has previously demonstrated a high correlation with stock price trajectories.

Valero's Forward P/E ratio of 14.46 does present a discount compared to the industry's Forward P/E of 16.54, suggesting some value in the stock. However, a PEG ratio equal to the industry average at 3.62 indicates a lower growth expectation relative to its price.

The Oil and Gas - Refining and Marketing industry, where Valero is categorized, has a poor Zacks Industry Rank placed in the bottom 6% of over 250 industries. This further supports the notion of a struggling environment for Valero Energy within the current market landscape.

Stocks: VLO