Valero Energy Stock Intrinsic Value – Is Valero Energy Corporation Undervalued on the Market?
November 16, 2023
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Although Valero has a robust portfolio of assets and a strong financial position, there are some concerns that should be taken into account before investing in the company’s stock.
Additionally, some analysts have also noted that Valero’s dividend yield is relatively low compared to its peers. Finally, the future outlook for Valero depends largely on macroeconomic conditions such as oil prices. Although there are risks associated with investing in Valero Energy ($NYSE:VLO) Corporation, the company is still a strong contender in the oil refining industry and has a long track record of success. In light of this, investors should consider all of the factors outlined above when deciding whether or not Valero Energy Corporation is undervalued on the market.
Share Price
Valero Energy Corporation is one of the nation’s largest independent refiners and marketers of petroleum products, with a presence in the US, Canada, the Caribbean, and the United Kingdom. On Monday, its stock opened at $122.7 and closed at $124.3, up by 1.3% from its prior closing price of $122.7. This has prompted some to ask whether Valero Energy is undervalued on the market. Generally, stocks are considered to be undervalued if their current price is lower than their «true» or fair value. Analysts use several methods to estimate this true or fair value, such as the discounted cash flow (DCF) model. This model takes into account future expected cash flows that a company will generate, and discounts them back to present value. By doing so, analysts can estimate the fair value of a company’s stock. Valero Energy Corporation’s financial performance over the past few years has been impressive. The company has seen steady growth in revenue and profits, and the stock price has reflected this growth. With its strong financial performance and relatively low stock price, some investors believe that Valero Energy Corporation may be undervalued on the market.
However, it is important to note that stock prices can be affected by factors other than their true or fair value. Market sentiment, macroeconomic conditions, and other factors can all influence the stock price. Therefore, it is important to consider these factors when trying to determine whether a stock is undervalued or not. The stock has been steadily growing over the past few years, and its current price reflects its strong financial performance. However, investors should keep an eye on the stock price in order to determine whether it becomes undervalued in the future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Valero Energy. More…
| Total Revenues | Net Income | Net Margin |
| 151.1k | 10.71k | 7.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Valero Energy. More…
| Operations | Investing | Financing |
| 12.09k | -2.12k | -8.22k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Valero Energy. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 63.17k | 35.12k | 76.3 |
Key Ratios Snapshot
Some of the financial key ratios for Valero Energy are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 25.6% | 185.1% | 10.0% |
| FCF Margin | ROE | ROA |
| 7.3% | 36.3% | 14.9% |
Analysis – Valero Energy Stock Intrinsic Value
At GoodWhale, we have conducted an analysis of VALERO ENERGY‘s fundamentals. After our examination, our proprietary Valuation Line has calculated an intrinsic value of around $133.2 for VALERO ENERGY’s shares. Currently, the stock is trading at $124.3, which makes it a fair price, albeit one that is undervalued by 6.7%. More…
Peers
Valero Energy Corp is one of the largest refiners and marketers of petroleum products in the United States. Its competitors include Marathon Petroleum Corp, Phillips 66, Delek US Holdings Inc.
– Marathon Petroleum Corp ($NYSE:MPC)
As of 2022, Marathon Petroleum Corporation has a market capitalization of 54.29 billion dollars and a return on equity of 32.4%. The company is engaged in the refining, marketing, and transportation of petroleum products and crude oil, as well as the production and marketing of natural gas and natural gas liquids. Marathon Petroleum is the largest refiner in the United States, with operations in 19 states and the District of Columbia. The company also has a significant presence in Canada, Europe, and Asia.
– Phillips 66 ($NYSE:PSX)
Phillips 66 has a market cap of $47.12 billion as of 2022 and a return on equity of 20.59%. The company is an energy manufacturing and logistics company with operations in the United States, Europe, and Asia. Phillips 66 is engaged in the refining, marketing, and transportation of crude oil, petroleum products, and natural gas. The company also has a chemicals business.
– Delek US Holdings Inc ($NYSE:DK)
Delek US Holdings Inc is a diversified downstream energy company with operations in refining, logistics, and retail. The company owns and operates four refineries with a combined capacity of approximately 620,000 barrels per day in Tyler, Texas; El Dorado, Arkansas; Big Spring, Texas; and Krotz Springs, Louisiana. It also owns and operates a fleet of approximately 4,000 railcars and a network of approximately 30 crude oil and refined product truck terminals. The company’s retail segment consists of approximately 350 company-operated convenience stores and fuel centers.
Summary
Valero Energy Corporation is an integrated oil refining and marketing company. Analysts have concluded that the current value of the company’s stock may be trading below its fair value. An investment analysis of Valero Energy would involve evaluating the company’s financials, its competitive position in the market, and any potential risks associated with the stock. The company’s financials should be examined to determine whether earnings and cash flows are sufficient to justify the current stock price.
Additionally, investors should assess the company’s competitive edge and review their ability to generate returns in a competitive environment. Lastly, investors should consider any potential risks associated with investing in Valero Energy, such as environmental regulations, commodity price fluctuations, and economic conditions. Overall, investors should conduct a thorough investment analysis prior to investing in Valero Energy.
