One-glance verdict
Within fair range
$339.82 our estimate vs market $397.04
Wall Street consensus: $355.47 (4.6% higher than our fair-value estimate)
17% above our estimate
Fundamentals snapshot
Valero Energy Corporation
VLO · NYQ · Energy · Oil & Gas Refining & Marketing
Current price
$397.04
52-week range
$155.29 - $399.76
Market cap
$114.32B
Balance sheet
Watch
7.76x Adequate
Net debt $3.48B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Returns 27.6% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 9/10 years.
- Risk Stock trades 45.9% above its 5-year average P/E.
- Risk Insider ownership is only 0.4% (peer median: 2.5%).
What this company does
Valero Energy Corporation
Valero Energy operates oil refineries, which are like giant factories that turn crude oil into fuels like gasoline, diesel, and jet fuel. The company makes most of its money from the refining margin (the price difference between the crude oil it buys and the refined fuels it sells). This means its financial performance is closely linked to oil prices and how much people are driving and flying.
How the company got here
Valero was created in 1980 from the spinoff of a natural gas pipeline company owned by Coastal States Gas Corporation. The name 'Valero' is a nod to the original name of the Alamo mission, Mission San Antonio de Valero. Initially focused on natural gas, the company quickly moved into petroleum refining and expanded significantly through a series of acquisitions of refineries and other assets. In 1997, Valero spun off its natural gas business to focus entirely on refining, a pivotal move that shaped the company into what it is today. Over the years, it has grown to become a major international manufacturer of transportation fuels and has also invested heavily in renewable fuels like ethanol and renewable diesel.
What it actually does
Valero takes raw materials like crude oil, corn, and used cooking oil and turns them into fuels that power cars, trucks, and airplanes. You would recognize their products as the gasoline you put in your car at stations with brands like Valero, Diamond Shamrock, and Beacon. Beyond the gas pump, they also produce jet fuel for airplanes, diesel for trucks, and asphalt for paving roads. The company operates on a large scale, selling its products through wholesale channels to distributors and retailers rather than primarily running its own gas stations.
Refining
This is Valero's largest and core business, where they take crude oil and process it into gasoline, diesel, jet fuel, and other petroleum-based products. This process happens at their 14 refineries located in the U.S., Canada, and the United Kingdom. The customers for these products are typically large wholesalers, distributors, and other businesses that then sell the fuel to the public. This segment is the main driver of the company's revenue (the total money it brings in from sales).
Renewable Diesel
This segment focuses on producing a cleaner-burning fuel that is chemically similar to petroleum diesel but is made from recycled materials like animal fats, used cooking oil, and corn oil. This business operates through a joint venture called Diamond Green Diesel. The renewable diesel is sold to customers in markets with stricter environmental standards, like California, Canada, and Europe, who are willing to pay for fuels that have a lower carbon footprint. This part of the company also produces sustainable aviation fuel (SAF), a key area of growth.
Ethanol
In this business, Valero uses corn to produce ethanol, a type of alcohol that is blended into most gasoline in the United States to make it burn cleaner and increase its octane rating. The company operates 12 ethanol plants and is the world's second-largest producer. Besides ethanol, this segment also creates co-products from the corn, such as distillers grains, which are sold as a high-protein feed for livestock. This provides an additional revenue stream from the same raw material.
What management is betting on now
Valero's leadership is focused on being a top producer of low-carbon transportation fuels, which are fuels that generate fewer greenhouse gas emissions. They are investing heavily in expanding their renewable diesel and sustainable aviation fuel production, anticipating that global demand for these cleaner alternatives will continue to grow due to environmental policies. At the same time, they are working to make their traditional refining and ethanol businesses more efficient and to reduce their own carbon intensity (a measure of greenhouse gas emissions per unit of production). The strategy is to maintain a strong position in traditional fuels while leading the transition to more sustainable energy sources.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$866.00M
FY2024 Q4
$523.00M
FY2025 Q1
$293.00M
FY2025 Q2
$529.00M
FY2025 Q3
$1.47B
Revenue
—
Net income
$3.72B
Diluted EPS
12.62
Operating cash flow
$5.58B
Free cash flow
—
Fetching…
Sources
Revenue
—
Net income
$1.26B
Diluted EPS
4.22
Operating cash flow
$1.39B
Free cash flow
—
Fetching…
Sources
Revenue
—
Net income
$1.13B
Diluted EPS
3.66
Operating cash flow
$2.06B
Free cash flow
—
Fetching…
Sources
Revenue
—
Net income
$1.09B
Diluted EPS
3.53
Operating cash flow
$1.88B
Free cash flow
$1.47B
Fetching…
Sources
Revenue
—
Net income
$714.00M
Diluted EPS
2.28
Operating cash flow
$936.00M
Free cash flow
$529.00M
Fetching…
Sources
Revenue
—
Net income
$-595.00M
Diluted EPS
-1.90
Operating cash flow
$952.00M
Free cash flow
$293.00M
Fetching…
Sources
Revenue
—
Net income
$281.00M
Diluted EPS
0.98
Operating cash flow
$1.07B
Free cash flow
$523.00M
Fetching…
Sources
Revenue
—
Net income
$364.00M
Diluted EPS
1.14
Operating cash flow
$1.29B
Free cash flow
$866.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $339.82 vs current price $397.04
Wall Street consensus is the average analyst price target: $355.47 (4.6% higher than our fair-value estimate).
Our most-likely fair value is $339.82 a share — about 14.4% away from today's price of $397.04, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $3.5B. Interest coverage 7.8x.
Net debt
$3.48B
Interest coverage
7.76x
Valero Energy Corporation's profit covers its interest bill about 7.8 times over. which is stronger than every peer shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
VLO
BASELINE
Valero Energy Corporation
Total debt $11.35B Interest coverage 7.76x This is the baseline the peer rows are being compared against.
Total debt $34.29B Interest coverage 4.08x -47% vs VLO Carries about 1.9x less debt cushion than VLO.
Total debt $20.57B Interest coverage 3.11x -60% vs VLO Carries about 2.5x less debt cushion than VLO.
Total debt $2.52B Interest coverage -4.46x -100% vs VLO This peer has almost no interest-payment cushion compared with VLO.
Total debt $3.34B Interest coverage 4.27x -45% vs VLO Carries about 1.8x less debt cushion than VLO.
Total debt $3.43B Interest coverage 0.92x -88% vs VLO Carries about 8.4x less debt cushion than VLO.
What you should know
The case for and against VLO
3 Rewards
2 Risks
Rewards
-
Returns 27.6% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 9/10 years.
-
Dividend yield is 1.2% with 45-year payout history.
Risks
-
Stock trades 45.9% above its 5-year average P/E.
-
Insider ownership is only 0.4% (peer median: 2.5%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
16.56x
Forward P/E
11.21x
P/B
4.57x
P/S
0.86x
EV/EBITDA
9.05x
PEG ratio
4.08x
Profitability
How much profit each dollar creates
Gross margin
16.1%
Operating margin
12.3%
Net margin
5.4%
ROE
27.6%
ROA
10.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.40x
Current ratio
1.64x
Quick ratio
1.05x
Total debt
$11.35B
Total cash
$7.87B
Growth
How the business has been compounding
Revenue TTM
$132.43B
Revenue 5Y CAGR
-11.4%
EPS TTM
23.98
EPS 5Y CAGR
-36.1%
Cash flow
How much cash the business throws off
Operating CF TTM
$10.91B
Free CF TTM
$4.63B
FCF margin
3.5%
Dividend
Shareholder payout
Yield
1.2%
Payout ratio
19.4%
Last ex-div date
2026-07-31