- The shareholders of Valero Energy have enjoyed a very strong rally thus far into 2022 with their share price slightly more than 80% higher since the year began.
- These booming operating conditions obviously cannot last forever but even if they did, their shareholder returns are relatively lackluster even at the upper end of their targeted range.
- Even worse, if operating conditions revert to their 2021 levels, which was not bad overall, their shareholders would be left only with a low shareholder yield of circa 3%.
- Sadly this makes their current share price seem exorbitantly expensive with the potential for large losses.
- Since these losses could easily reach 25% to 50%, I believe that downgrading to a sell rating is now appropriate.
For further details see:
Valero Energy: Exorbitantly Expensive With Potential For Large Losses