VLO - Valero's Buyback Makes Shares Attractive Given A Favorable Environment

2024-05-15 13:29:35 ET

Summary

• Valero Energy's shares have pulled back about 15% due to concerns over the refining environment and diesel margins, but are up solidly over the past year.
• The company's Q1 results showed a decline in earnings compared to last year, but the refining cycle is likely to improve in Q2/Q3.
• Valero's strong cash flow and healthy balance sheet allow for share buybacks and dividend payments, making the stock attractive.

Shares of Valero Energy ( VLO ) have been a strong performer over the past year, rising by 37%, but recently they have pulled back about 15% given some concerns over the refining environment and diesel margins. I last covered Vale ro in October , rating shares a buy. Since then, they have returned 26%, a strong absolute return but simply in-line with the broader market’s ongoing rally. I continue to view the secular backdrop for VLO as favorable but with shares at my prior price target of $150, now is an opportune time to revisit the stock....

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