- Valero Energy is well-positioned to benefit from high crack spreads. For now, crack spreads are approximately $52.
- Valero Energy is eager to bolster up its balance sheet in the first instance, rather than repurchase shares. I believe this is the right course of action at this juncture.
- I estimate that Valero Energy is priced at 6x this year's free cash flows. But looking out to 2023, the picture rapidly becomes fuzzy.
- All in all, I rate VLO stock with a lukewarm buy rating.
- As always, looking forward to discussing my thesis further.
For further details see:
Valero Energy: Still Attractive At 6x FCF