Start here if you're new
what it is
Valero turns crude oil into gasoline, diesel, and ethanol across 15 refineries and 12 plants.
how it gets paid
Last year Valero Energy made $122.7B in revenue. gasoline was the main engine at $60.1B, or 49% of sales.
why growth slowed
Revenue fell 5.5% last year. Revenue was $92.3B, and 2025 throughput averaged 3.1 million barrels a day at about 98% utilization.
what just happened
Valero's $3.73 EPS beat $2.59 estimates by 44.0%.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
5/100 earnings predictability — expect surprises
26.6x trailing p/e — priced about right
2.5% dividend yield — cash in your pocket every quarter
10.0% return on capital — nothing to write home about
xvary composite: 65/100 — average
What they do
Valero turns crude oil into gasoline, diesel, and ethanol across 15 refineries and 12 plants.
Valero ran 3.1 million barrels a day in 2025, about 98% of its 3.2 million-barrel capacity. Capacity → how much it can process → so you own a 15-refinery network, not a single plant. That scale matters because 1% less downtime on 3.2 million barrels is 32,000 barrels a day.
How they make money
$122.7B
annual revenue · their business grew -5.5% last year
gasoline
$60.1B
distillates
$46.6B
other products
$16.0B
The products that matter
refines and sells transportation fuels
petroleum products
$104.3B revenue · 85% of sales
This is the center of gravity. If you own VLO, most of your exposure is still to fuel demand, crude costs, and refining spreads.
85% of sales
moves and supports fuel volumes
logistics and services
$12.3B revenue · roughly 10% of sales
This piece is smaller, but it matters because it gives you some steadier support next to the more volatile refining engine.
supporting engine
what is not fully broken out here
remaining revenue
~$6.1B implied
The disclosed pieces add up to $116.6B versus total revenue of $122.7B. This page does not fully break out the remaining roughly 5%, so we are not going to fake precision.
thin disclosure
Key numbers
$201.38
share price
You pay $201.38 today, while VL’s 18-month target is $173. That is a $28.38 gap, or 14%.
26.6x
trailing p/e
Price-to-earnings → price divided by last year’s profit → you are paying 26.6 years of current earnings.
2.5%
dividend yield
Dividend yield → annual cash paid on the stock price → you collect about $2.50 a year for every $100 invested.
3.1M bpd
2025 throughput
Throughput → barrels processed each day → 98% utilization means the refineries were nearly full.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 45 / 100
- long-term debt $9.7B (14% of capital)
- net profit margin 3.2% — keeps 3 cents of every dollar in revenue
- return on equity 14% — $0.14 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in VLO 3 years ago → it's now worth $16,770.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Valero's $3.73 EPS beat $2.59 estimates by 44.0%.
Revenue was $92.3B, and 2025 throughput averaged 3.1 million barrels a day at about 98% utilization. That kept the quarter ahead of the street, even with a refinery business that still lives and dies by volume.
$92.3B
revenue
$3.73
eps
44.0%
surprise
the number that mattered
44.0% was the point: Valero beat the $2.59 estimate by $1.14 a share, which says the downside case was too cautious.
-
valero energy delivered a strong finish to 2025.fourth-quarter net income was $1.1 billion, or $3.73 per share, reflecting high utilization, firm product margins, and cheaper sour-crude inputs.
-
refining throughput averaged 3.1 million barrels per day in 2025 (about 98% utilization), while operating performance remained strong across the system.
-
ethanol results benefited from record production, while depreciation expense rose due to the plan to cease operations at benicia (by shortening the remaining useful life of the assets).
-
we look for a meaningful earnings rebound in 2026 and a solid followthrough next year.management expects medium and heavy sour crude differentials to remain favorable, supported by increased canadian supply and the return of venezuelan barrels into the gulf coast market, which fits valero’s highcomplexity refining assets. planned maintenance looks to temper first-quarter results, and benicia-related depreciation will likely weigh on near-term comparisons. still, per-share earnings should benefit from refining margin capture, steadier renewable diesel results, and ongoing buybacks.
-
our estimates call for profits of roughly $12.40 per share in 2026, and $13.10 in 2027.over the 2029-2031 period, valero should continue to operate as a decent cash generating business in a cyclical industry.
source: company earnings report, 2026
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What could go wrong
Valero does not need a catastrophe to disappoint you. It needs weaker spreads, softer fuel demand, or a rebound thesis that shows up later than the stock price wants.
med
refining margin compression
Valero keeps only 3.1 cents of each revenue dollar. Crack spreads — the gap between crude costs and refined product prices — do most of the earnings work here. If that gap narrows, profits fall much faster than revenue.
Direct exposure: the $104.3B petroleum products segment is 85% of sales, so the main engine is also the main risk.
med
fuel demand softens at the wrong time
A weaker economy can hit volume and pricing together. Revenue already fell 5.5% last year. You do not need a dramatic recession for this business to feel smaller.
That matters because $122.7B of annual sales still turns into only a 3.1% net margin.
med
the 2026 rebound arrives late or smaller than expected
The gap between 26.6x trailing earnings and roughly 16.2x forward earnings is the market telling you next year should look better. If crude differentials do not cooperate, the valuation argument weakens fast.
The stock at $201.38 already sits above the $173 midpoint target in this data set, so you have less room for a merely okay outcome.
med
outside the core segment, disclosure is thinner than ideal
This snapshot clearly shows the $104.3B petroleum business and the $12.3B logistics business, but not every remaining revenue stream is fully broken out here. That limits how precise you can be about where resilience really sits.
Roughly $6.1B of revenue is implied rather than cleanly segmented on this page.
Most of the risk runs through one number: 85% of revenue comes from petroleum products, and a 3.1% net margin leaves little room for bad spreads.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next earnings report
The next quarterly report is expected april 30, 2026. This is where the rebound case gets fresh proof or loses another quarter.
metric
quarterly margin direction
Watch whether net margin can stay around or above the recent 3.4% quarterly level. Here's the thing: small margin moves do outsized work in this business.
risk
crude differentials on the Gulf Coast
Management's 2026 optimism leans on favorable crude differentials. In plain English: cheaper inputs relative to fuel prices. If that setup fades, the rebound gets harder.
trend
price versus target tension
The stock is at $201.38 while the midpoint target is $173. Either the target is stale, or the market is pricing a stronger cycle than analysts are.
Analyst rankings
short-term outlook
top 20%
Momentum score 2. Analysts expect above-average price performance in the year ahead. In human-speak, they think the cycle still has support.
risk profile
average
Stability score 3. You are not buying a bunker stock. You are buying a normal-risk company whose earnings happen to be very cycle-sensitive.
chart momentum
top 20%
Technical score 2. The tape has been supportive. The catch is that momentum usually follows earnings expectations in a name like this.
earnings predictability
5 / 100
Very low predictability. Translation: quarter-to-quarter earnings can move around more than most investors enjoy.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 708 buyers vs. 634 sellers in 3q2025. total institutional holdings: 0.3B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$97
$248
$201
current price
$173
target midpoint · 14% from current · 3-5yr high: $330 (+65% · 15% ann'l return)
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