In a report released on April 4, Lloyd Byrne from Jefferies maintained a Buy rating on Valero Energy (VLO – Research Report), with a price target of $154.00.
Lloyd Byrne has given his Buy rating due to a combination of factors that highlight Valero Energy’s potential for growth despite some current challenges. The company is expected to experience lower earnings in the first quarter due to softer refining margins and higher operational expenses, particularly influenced by an unplanned outage at Corpus Christi and seasonal headwinds affecting capture rates. However, Byrne anticipates that Valero’s strategic management of these issues, including their handling of the 45Z tax credit impact on renewable diesel, will position them well for future quarters.
Moreover, Valero Energy’s cash flow remains robust, with a projected $814 million in cash flow from operations and a free cash flow of $314 million after capital expenditures. The company’s recent bond refinancing has also bolstered its cash position, allowing for continued share buybacks and dividend payouts. These financial strategies, coupled with Valero’s ability to navigate current market conditions, underpin Byrne’s confidence in the company’s long-term prospects, justifying the Buy rating.
According to TipRanks, Byrne is a 5-star analyst with an average return of 15.0% and a 46.67% success rate. Byrne covers the Energy sector, focusing on stocks such as Civitas Resources, Northern Oil And Gas, and Suncor Energy.
In another report released today, Piper Sandler also maintained a Buy rating on the stock with a $144.00 price target.