Track market-moving stories before they get noisy

Atlatl Advisers LLC bought a new stake in shares of Valero Energy Corporation (NYSE: VLO) in the third quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor bought 26,332 shares of the oil and gas company's stock, valued at approximately

Key Takeaways VLO surged 149.2% over the past year versus PSX's 110.8% gain, with both benefiting from strong margins.VLO's access to cheaper heavy crude and diverse feedstocks helps control costs amid elevated oil prices.PSX's diversified operations and debt reduction bolster resilience, while VLO trades at a lower valuation. Valero Energy Corporation (VLO - Free Report) and Phillips 66 (PSX - Free Report) are two large-cap energy players with promising business prospects, supported by their strong refining operations. Investors’ preference for both stocks is reflected in the price chart. Over the past year, VLO surged 149.2%, outperforming PSX’s 110.8% growth.

Image Source: Zacks Investment Research

However, the stock price performance does not necessarily establish VLO's superiority over PSX as a refining energy giant. Before arriving at an investment conclusion, let's examine the broader downstream business environment, which plays a crucial role in determining the cash flow potential of both energy majors.

VLO's Advantageous Position in Heavy Crude Aids ItThe Middle East tensions are driving crude oil prices higher, with West Texas Intermediate (“WTI”) hovering around $100 per barrel, according to Oilprice.com. The high crude price has significantly increased input costs for refiners such as VLO and PSX. However, unlike many refiners, Valero Energy has a heavy crude advantage, as heavy crude is cheaper than light crude like WTI.

Regarding the company’s access to diverse crude feedstocks, Valero has an advantage because its Gulf Coast refineries can buy crude oil from many low-cost sources, including the United States, Canada and Venezuela. This gives the company more flexibility to purchase cheaper oil, which helps keep refining costs low and can boost profits when competitors have fewer sourcing options.

Constrained Global Refining Capacity is a Boon for VLO & PSX?Global refining capacity is constrained and fuel inventories are low. On the demand side, gasoline and diesel remain resilient. This means people are still driving, while diesel demand suggests transportation and freight activity are still holding up. As a result, with refineries busy and fuel in limited supply, refiners’ margins are quite strong.

With crude prices likely to remain high, investors shouldn’t allocate their money only to exploration and production companies but also to refining players like VLO, even though high crude prices have been increasing refiners’ input costs.

The same story applies to PSX, as the energy major also noted that there aren’t enough refineries or products globally right now because much refining capacity is offline and fuel inventories are low.

PSX’s Resilient Business Model & Debt Reduction FocusAlthough a leading refiner, PSX, unlike most of its refining peers, has diversified its business across midstream and chemicals. Along with investing in refining operations, Phillips 66 is allocating significant capital to midstream.

The midstream business, by its very definition, is stable since the company generates stable cash flows as the assets are being utilized for the long term and is less vulnerable to commodity price volatility. Hence, with a diversified business model, PSX is largely insulated from commodity price volatility.

Moreover, debt reduction remains on track, with PSX targeting roughly $17 billion of total debt by 2026-end versus almost $21 billion in the second quarter, while net debt is expected to improve from $16.5 billion to less than $16 billion.

Image Source: Phillips 66

VLO or PSX: Which is a Better Stock?Coming to the valuation, VLO stock is currently relatively cheap, as the energy company is trading at a trailing 12-month EV/EBITDA multiple of 9.00x, which is lower than PSX’s 12.52x. In other words, investors are willing to pay a premium price for PSX over VLO.

Image Source: Zacks Investment Research

The premium valuations reflect PSX’s strong business fundamentals, sound balance sheet and resilient business model. VLO also presents a compelling investment case, given its relatively attractive valuation and the prevailing strength in the refining business environment.

Currently, both stocks are highly investment-worthy and sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Takeaways Widening crude discounts, resilient fuel demand and favorable Gulf Coast refining economics aid Valero.VLO's renewable diesel operating income rebounded to $353M from a $28M loss, supported by improving margins.Valero ended September with $9.8B in cash and returned 52% of adjusted operating cash flow to shareholders.
Valero Energy Corporation’s (VLO - Free Report) management highlighted favorable refining fundamentals, widening crude discounts and resilient transportation fuel demand during its third-quarter 2026 earnings call. Executives expressed confidence in the company's competitive position despite volatile energy markets.

Management also outlined fourth-quarter operating expectations, shareholder returns and opportunities to improve refinery flexibility. Higher freight costs and potential demand destruction emerged as important discussion points.

Valero Energy reported adjusted earnings of $23.90 per share for the third quarter of 2026, surpassing the Zacks Consensus Estimate of $21.28. Quarterly revenues totaled $46.10 billion, exceeding the Zacks Consensus Estimate of $37.39 billion.

Freight Disruptions Favor VLO's Gulf Coast OperationsRandy Hawkins, vice president of Crude and Feedstocks Supply and Trading, explained that elevated shipping costs have widened crude discounts, benefiting Valero's Gulf Coast refining system.

Hawkins noted that shipping a very large crude carrier from the Gulf Coast to Asia now costs approximately $30-$35 per barrel, compared with around $5 in 2025.

He emphasized that access to discounted heavy sour crude provides a competitive advantage. Additional supplies from Canada, Venezuela and the Middle East underpin management's constructive long-term outlook.

Valero Sees Resilient Fuel DemandGary Simmons, executive vice president and chief operating officer, reported limited evidence of demand destruction despite elevated fuel prices.

U.S. wholesale gasoline sales increased 4% year over year on a seven-day average basis, while distillate sales rose 2%. Export demand remained strong across key markets.

Responding to questions from Piper Sandler and TD Cowen, Simmons acknowledged uncertainty around fuel-price sensitivity. He cautioned that further increases in crude prices could compress refining margins.

VLO Outlines Q4 Operating ExpectationsChief financial officer Homer Bhullar projected fourth-quarter refining throughput of 1.855- 1.905 million barrels per day in the Gulf Coast region.

Management expects Mid-Continent throughput of 440,000-460,000 barrels per day and North Atlantic throughput of 480,000-500,000 barrels. Refining cash operating expenses are projected at approximately $4.85 per barrel.

Simmons highlighted favorable heavy sour crude discounts, gasoline blending economics and improving jet fuel differentials. He also indicated that deferred industry maintenance could contribute to heavier refinery turnaround activity in 2027.

Valero Highlights Renewable Fuels OpportunitiesThe Renewable Diesel segment generated third-quarter operating income of $353 million, recovering from a $28 million loss a year earlier.

Eric Honeyman, senior vice president of Renewables Operations and Low Carbon Fuels, attributed margin variability partly to feedstock pricing delays, operational disruptions and renewable identification number volatility.

Honeyman remained positive about fourth-quarter renewable diesel margins. He also outlined incremental ethanol capacity expansion opportunities and carbon sequestration projects targeting completion between late 2027 and mid-2028.

VLO Maintains Flexible Capital AllocationBhullar emphasized balance-sheet flexibility following strong cash generation. Valero ended September with $9.8 billion in cash and cash equivalents.

Although management's long-term cash target remains $4-$5 billion, Bhullar defended retaining additional liquidity against commodity volatility and potential working-capital requirements.

The company returned 52% of adjusted operating cash flow to its shareholders during the quarter. Bhullar indicated that excess cash would ultimately support shareholder distributions, with repurchases providing flexibility alongside sustainable dividend growth.

Valero Prioritizes Refining Efficiency InvestmentsChairman and chief executive officer Lane Riggs highlighted completion of the $230 million St. Charles FCC optimization project on schedule and within budget.

Simmons said the project exceeded its investment-decision EBITDA expectations during the quarter, despite operating for only part of the period.

Riggs identified additional opportunities in heavy sour crude processing, feedstock flexibility and refinery debottlenecking. Management maintained approximately $2 billion in planned 2026 capital investments attributable to Valero.

VLO Retains a Disciplined Strategic ApproachManagement remained constructive on refining fundamentals while acknowledging uncertainties surrounding crude prices, shipping disruptions and industry maintenance requirements.

Riggs also expressed interest in selective refining acquisitions but emphasized that investment decisions would continue to reflect returns across the economic cycle rather than unusually favorable current margins.

The company's priorities remain operational reliability, competitive feedstock sourcing, disciplined spending and sustainable shareholder returns.

Zacks Rank and Style Scores Signal Favorable ProspectsVLO currently sports a Zacks Rank #1 (Strong Buy), indicating favorable earnings estimate revisions and stronger near-term performance potential under the Zacks ranking framework. You can see the complete list of today’s Zacks #1 Rank stocks here.

Valero's Growth, Momentum and VGM Scores of A reinforce its favorable positioning across these investment characteristics. However, the Value Score of C indicates a comparatively less compelling valuation profile.

The combination of a top Zacks Rank and an A-rated VGM Score is favorable under the Zacks methodology. Nevertheless, the stock's Zacks Rank may change as analysts revise earnings estimates following the third-quarter results.

Diversify Advisory Services LLC lifted its stake in Valero Energy Corporation (NYSE: VLO) by 103.6% during the third quarter, according to the company in its most recent Form 13F filing with the SEC. The fund owned 7,820 shares of the oil and gas company's stock after acquiring an additional 3,979 shares during the

Valero Energy Corporation (VLO) Q3 2026 Earnings Call Transcript

Valero Energy Corporation (NYSE:VLO) reported third-quarter adjusted EPS of $23.90, beating analyst expectations of $21.01.

SAN ANTONIO, Texas--(BUSINESS WIRE)--Valero Energy Corporation (NYSE: VLO, “Valero”) today reported net income attributable to Valero stockholders of $6.8 billion, or $23.89 per share, for the third quarter of 2026, compared to $1.1 billion, or $3.53 per share, for the third quarter of 2025. Excluding the adjustments shown in the accompanying earnings release tables, adjusted net income attributable to Valero stockholders for the third quarter of 2026 was $6.8 billion, or $23.90 per share, compared to $1.1 billion, or $3.66 per share, for the third quarter of 2025.

“Our refineries operated at near-record utilization rates, providing a reliable supply of critical transportation fuels during the quarter,” said Lane Riggs, Valero’s Chairman, Chief Executive Officer and President. “We also completed the St. Charles FCC Unit optimization project, which increases the production capacity of higher value products, including alkylate and gasoline, further strengthening our ability to supply transportation fuels to the market.”

Refining

The Refining segment reported operating income of $8.8 billion for the third quarter of 2026, compared to $1.6 billion for the third quarter of 2025. Adjusted operating income for the third quarter of 2026 was $8.8 billion, compared to $1.7 billion for the third quarter of 2025. Refining throughput volumes averaged 3.0 million barrels per day in the third quarter of 2026.

Renewable Diesel

The Renewable Diesel segment, which consists of the Diamond Green Diesel joint venture (DGD), reported operating income of $353 million for the third quarter of 2026, compared to an operating loss of $28 million for the third quarter of 2025. Segment sales volumes averaged 3.4 million gallons per day in the third quarter of 2026.

Ethanol

The Ethanol segment reported operating income of $272 million for the third quarter of 2026, compared to $183 million for the third quarter of 2025. Ethanol production volumes averaged 4.8 million gallons per day in the third quarter of 2026, setting a new quarterly record.

Corporate and Other

General and administrative expenses were $308 million in the third quarter of 2026. The effective tax rate for the third quarter of 2026 was 23 percent.

Investing and Financing Activities

Net cash provided by operating activities was $6.9 billion in the third quarter of 2026. Included in this amount was a $526 million unfavorable impact from working capital and $205 million of adjusted net cash provided by operating activities associated with the other joint venture member’s share of DGD. Excluding these items, adjusted net cash provided by operating activities was $7.3 billion in the third quarter of 2026.

Capital investments totaled $432 million in the third quarter of 2026, of which $371 million was for sustaining the business, including costs for turnarounds, catalysts and regulatory compliance. Excluding capital investments attributable to the other joint venture member’s share of DGD and other variable interest entities, capital investments attributable to Valero were $429 million in the third quarter of 2026.

Valero stockholder cash returns resulted in a payout ratio of 52 percent of adjusted net cash provided by operating activities.

Liquidity and Financial Position

Valero repaid the outstanding principal balances of $100 million of its 7.65% Debentures that matured in July and $426 million of its 3.400% Senior Notes that matured in September. Valero ended the third quarter of 2026 with $8.6 billion of total debt, $2.4 billion of total finance lease obligations, and $9.8 billion of cash and cash equivalents. The debt to capitalization ratio, net of cash and cash equivalents, was 4 percent as of September 30, 2026.

“Our third-quarter performance underscores the quality of our assets and our consistent operational, commercial, and financial performance,” said Riggs. “This is a result of the long-term strategy that we’ve been committed to for well over a decade.”

Strategic Update

During the third quarter, Valero completed the FCC Unit optimization project at the St. Charles Refinery on schedule and within budget. The project is now operational and is expected to enhance the refinery’s ability to produce higher-value products.

Conference Call

Valero’s senior management will hold a conference call at 10 a.m. ET today to discuss this earnings release and to provide an update on operations and strategy.

About Valero

Valero Energy Corporation, through its subsidiaries (collectively, Valero), is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products, and sells its products primarily in the United States (U.S.), Canada, the United Kingdom (U.K.), Ireland, and Latin America. Valero operates 14 petroleum refineries located in the U.S., Canada, and the U.K. with a combined throughput capacity of approximately 3.0 million barrels per day. Valero is a joint venture member in Diamond Green Diesel Holdings LLC, which produces low-carbon fuels including renewable diesel and sustainable aviation fuel (SAF), with a production capacity of approximately 1.2 billion gallons per year in the U.S. Gulf Coast region. See the annual report on Form 10-K for more information on SAF. Valero also owns 12 ethanol plants located in the U.S. Mid-Continent region with a combined production capacity of approximately 1.7 billion gallons per year. Valero manages its operations through its Refining, Renewable Diesel, and Ethanol segments. Please visit investorvalero.com for more information.

Valero Contacts
Investors:
Brian Donovan, Vice President – Investor Relations, 210-345-1682
Eric Herbort, Director – Investor Relations and Finance, 210-345-3331
Gautam Srivastava, Director – Investor Relations, 210-345-3992

Media:
Lillian Riojas, Executive Director – Media Relations and Communications, 210-345-5002

Safe-Harbor Statement

Statements contained in this release and the accompanying earnings release tables, or made during the conference call, that state Valero’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “believe,” “expect,” “should,” “estimates,” “intend,” “target,” “commitment,” “plans,” “forecast,” “guidance,” “evaluate,” “opportunity” and other similar expressions identify forward-looking statements. Forward-looking statements in this release and the accompanying earnings release tables include, and those made on the conference call may include, statements relating to Valero’s low-carbon fuels strategy, expected timing, cost and performance of projects, our plans, actions, assets and operations in California and expected timing and cost of obligations and other financial, operational, or strategic statement impacts, future market and industry conditions, future operating and financial performance, including future capital expenditures and capital investments attributable to Valero, future production and manufacturing ability and size, expectations regarding our sources and uses of cash, future legal and regulatory developments, including those with respect to tariffs and low-carbon fuels, expectations and ongoing uncertainties related to our Port Arthur Refinery, and management of future risks, among other matters. It is important to note that actual results could differ materially from those projected in such forward-looking statements based on numerous factors, including those outside of Valero’s control, such as legislative or political changes or developments, market dynamics, cyberattacks, weather events, and other matters affecting Valero’s operations and financial performance or the demand for Valero’s products. These factors also include, but are not limited to, the uncertainties that remain with respect to current or contemplated legal, political, or regulatory developments that are adverse to tariffs, global geopolitical and other conflicts and tensions, the impact of inflation and crude oil and petroleum product market disruptions on margins and costs, economic activity levels, actions in response to supply and demand imbalances for refined petroleum products, and the adverse effects the foregoing may have on Valero’s business plan, strategy, operations and financial performance. For more information concerning these and other factors that could cause actual results to differ from those expressed or forecasted, see Valero’s annual report on Form 10-K, quarterly reports on Form 10‑Q, and other reports filed with the Securities and Exchange Commission and available on Valero’s website at www.valero.com.

Use of Non-GAAP Financial Information

This earnings release and the accompanying earnings release tables include references to financial measures that are not defined under U.S. generally accepted accounting principles (GAAP). These non-GAAP measures include adjusted net income attributable to Valero stockholders, adjusted earnings per common share – assuming dilution, Refining margin, Renewable Diesel margin, Ethanol margin, adjusted Refining operating income, adjusted Refining operating expenses (excluding depreciation and amortization), adjusted net cash provided by operating activities, and capital investments attributable to Valero. These non-GAAP financial measures have been included to help facilitate the comparison of operating results between periods. See the accompanying earnings release tables for a definition of non-GAAP measures and a reconciliation to their most directly comparable GAAP measures. Note (h) to the earnings release tables provides reasons for the use of these non-GAAP financial measures.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS

(millions of dollars, except per share amounts)

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Statement of income data

Revenues

$

46,098

$

32,168

$

122,955

$

92,315

Cost of sales:

Cost of materials and other (a)

32,741

26,132

94,056

76,858

Taxes other than income taxes (b)

1,654

1,826

5,023

4,980

Operating expenses (excluding depreciation and amortization expense reflected below) (c)

1,627

1,614

4,728

4,659

Depreciation and amortization expense

669

824

2,220

2,290

Total cost of sales

36,691

30,396

106,027

88,787

Asset impairment loss (d)

—

—

—

1,131

Other operating expenses (e)

11

5

61

13

General and administrative expenses (excluding depreciation and amortization expense reflected below)

308

246

826

727

Depreciation and amortization expense

15

12

41

51

Operating income

9,073

1,509

16,000

1,606

Other income, net

127

86

375

292

Interest and debt expense, net of capitalized interest

(144

)

(139

)

(429

)

(417

)

Income before income tax expense

9,056

1,456

15,946

1,481

Income tax expense

2,067

390

3,562

404

Net income

6,989

1,066

12,384

1,077

Less: Net income (loss) attributable to noncontrolling interests

161

(29

)

573

(137

)

Net income attributable to Valero Energy Corporation stockholders

$

6,828

$

1,095

$

11,811

$

1,214

Earnings per common share

$

23.90

$

3.54

$

40.30

$

3.89

Weighted-average common shares outstanding (in millions)

285

309

292

311

Earnings per common share – assuming dilution

$

23.89

$

3.53

$

40.29

$

3.89

Weighted-average common shares outstanding – assuming dilution (in millions)

285

309

292

312

  See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS BY SEGMENT

(millions of dollars)

(unaudited)

Refining

Renewable
Diesel

Ethanol

Corporate
and
Other (f)

Total

Three months ended September 30, 2026

Revenues:

Revenues from external customers

$

44,369

$

664

$

1,065

$

—

$

46,098

Intersegment revenues

3

1,729

352

(2,084

)

—

Total revenues

44,372

2,393

1,417

(2,084

)

46,098

Cost of sales:

Cost of materials and other

31,988

1,883

962

(2,092

)

32,741

Taxes other than income taxes (b)

1,654

—

—

—

1,654

Operating expenses (excluding depreciation and amortization expense reflected below)

1,376

86

165

—

1,627

Depreciation and amortization expense

580

71

18

—

669

Total cost of sales

35,598

2,040

1,145

(2,092

)

36,691

Other operating expenses (e)

(8

)

—

—

19

11

General and administrative expenses (excluding depreciation and amortization expense reflected below)

—

—

—

308

308

Depreciation and amortization expense

—

—

—

15

15

Operating income by segment

$

8,782

$

353

$

272

$

(334

)

$

9,073

Three months ended September 30, 2025

Revenues:

Revenues from external customers

$

30,414

$

719

$

1,035

$

—

$

32,168

Intersegment revenues

1

484

259

(744

)

—

Total revenues

30,415

1,203

1,294

(744

)

32,168

Cost of sales:

Cost of materials and other

24,858

1,077

942

(745

)

26,132

Taxes other than income taxes (b)

1,826

—

—

—

1,826

Operating expenses (excluding depreciation and amortization expense reflected below) (c)

1,388

78

148

—

1,614

Depreciation and amortization expense

728

76

21

(1

)

824

Total cost of sales

28,800

1,231

1,111

(746

)

30,396

Other operating expenses

5

—

—

—

5

General and administrative expenses (excluding depreciation and amortization expense reflected below)

—

—

—

246

246

Depreciation and amortization expense

—

—

—

12

12

Operating income (loss) by segment

$

1,610

$

(28

)

$

183

$

(256

)

$

1,509

  See Operating Highlights by Segment.

See Notes to Earnings Release Tables.

VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

FINANCIAL HIGHLIGHTS BY SEGMENT

(millions of dollars)

(unaudited)

  Refining

Renewable
Diesel

Ethanol

Corporate
and
Other (f)

Total

Nine months ended September 30, 2026

Revenues:

Revenues from external customers

$

117,474

$

2,551

$

2,930

$

—

$

122,955

Intersegment revenues

7

3,938

965

(4,910

)

—

Total revenues

117,481

6,489

3,895

(4,910

)

122,955

Cost of sales:

Cost of materials and other (a)

91,434

4,798

2,678

(4,854

)

94,056

Taxes other than income taxes (b)

5,023

—

—

—

5,023

Operating expenses (excluding depreciation and amortization expense reflected below)

3,985

262

481

—

4,728

Depreciation and amortization expense

1,947

220

56

(3

)

2,220

Total cost of sales

102,389

5,280

3,215

(4,857

)

106,027

Other operating expenses (e)

34

—

—

27

61

General and administrative expenses (excluding depreciation and amortization expense reflected below)

—

—

—

826

826

Depreciation and amortization expense

—

—

—

41

41

Operating income by segment

$

15,058

$

1,209

$

680

$

(947

)

$

16,000

Nine months ended September 30, 2025

Revenues:

Revenues from external customers

$

87,495

$

1,777

$

3,043

$

—

$

92,315

Intersegment revenues

5

1,424

681

(2,110

)

—

Total revenues

87,500

3,201

3,724

(2,110

)

92,315

Cost of sales:

Cost of materials and other

73,015

3,016

2,962

(2,135

)

76,858

Taxes other than income taxes (b)

4,980

—

—

—

4,980

Operating expenses (excluding depreciation and amortization expense reflected below) (c)

3,986

228

446

(1

)

4,659

Depreciation and amortization expense

2,029

205

59

(3

)

2,290

Total cost of sales

84,010

3,449

3,467

(2,139

)

88,787

Asset impairment loss (d)

1,131

—

—

—

1,131

Other operating expenses

13

—

—

—

13

General and administrative expenses (excluding depreciation and amortization expense reflected below)

—

—

—

727

727

Depreciation and amortization expense

—

—

—

51

51

Operating income (loss) by segment

$

2,346

$

(248

)

$

257

$

(749

)

$

1,606

  See Operating Highlights by Segment.

See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (h)

(millions of dollars, except per share amounts)

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Reconciliation of net income attributable to Valero Energy Corporation stockholders to adjusted net income attributable to Valero Energy Corporation stockholders

Net income attributable to Valero Energy Corporation stockholders

$

6,828

$

1,095

$

11,811

$

1,214

Adjustments:

Last-in, first-out (LIFO) liquidation adjustment (a)

—

—

(44

)

—

Income tax expense related to the LIFO liquidation adjustment

—

—

10

—

LIFO liquidation adjustment, net of taxes

—

—

(34

)

—

Employee retention and separation costs (c)

—

50

—

50

Income tax benefit related to employee retention and separation costs

—

(11

)

—

(11

)

Employee retention and separation costs, net of taxes

—

39

—

39

Asset impairment loss (d)

—

—

—

1,131

Income tax benefit related to asset impairment loss

—

—

—

(254

)

Asset impairment loss, net of taxes

—

—

—

877

Port Arthur Refinery fire expenses (e)

4

—

19

—

Income tax benefit related to Port Arthur Refinery fire expenses

(1

)

—

(5

)

—

Port Arthur Refinery fire expenses, net of taxes

3

—

14

—

Total adjustments

3

39

(20

)

916

Adjusted net income attributable to Valero Energy Corporation stockholders

$

6,831

$

1,134

$

11,791

$

2,130

Reconciliation of earnings per common share – assuming dilution to adjusted earnings per common share – assuming dilution

Earnings per common share – assuming dilution

$

23.89

$

3.53

$

40.29

$

3.89

Adjustments:

LIFO liquidation adjustment (a)

—

—

(0.12

)

—

Employee retention and separation costs (c)

—

0.13

—

0.12

Asset impairment loss (d)

—

—

—

2.81

Port Arthur Refinery fire expenses (e)

0.01

—

0.05

—

Total adjustments

0.01

0.13

(0.07

)

2.93

Adjusted earnings per common share – assuming dilution

$

23.90

$

3.66

$

40.22

$

6.82

  See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Reconciliation of operating income (loss) by segment to segment margin, and reconciliation of operating income (loss) by segment to adjusted operating income by segment

Refining segment

Refining operating income

$

8,782

$

1,610

$

15,058

$

2,346

Adjustments:

LIFO liquidation adjustment (a)

—

—

(44

)

—

Operating expenses (excluding depreciation and amortization expense reflected below) (c)

1,376

1,388

3,985

3,986

Depreciation and amortization expense

580

728

1,947

2,029

Asset impairment loss (d)

—

—

—

1,131

Other operating expenses (e)

(8

)

5

34

13

Refining margin

$

10,730

$

3,731

$

20,980

$

9,505

Refining operating income

$

8,782

$

1,610

$

15,058

$

2,346

Adjustments:

LIFO liquidation adjustment (a)

—

—

(44

)

—

Employee retention and separation costs (c)

—

50

—

50

Asset impairment loss (d)

—

—

—

1,131

Other operating expenses (e)

(8

)

5

34

13

Adjusted Refining operating income

$

8,774

$

1,665

$

15,048

$

3,540

Renewable Diesel segment

Renewable Diesel operating income (loss)

$

353

$

(28

)

$

1,209

$

(248

)

Adjustments:

Operating expenses (excluding depreciation and amortization expense reflected below)

86

78

262

228

Depreciation and amortization expense

71

76

220

205

Renewable Diesel margin

$

510

$

126

$

1,691

$

185

Ethanol segment

Ethanol operating income

$

272

$

183

$

680

$

257

Adjustments:

Operating expenses (excluding depreciation and amortization expense reflected below)

165

148

481

446

Depreciation and amortization expense

18

21

56

59

Ethanol margin

$

455

$

352

$

1,217

$

762

  See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Reconciliation of Refining segment operating income (loss) to Refining margin (by region), and reconciliation of Refining segment operating income (loss) to adjusted Refining segment operating income (by region) (i)

U.S. Gulf Coast region

Refining operating income

$

5,246

$

940

$

9,479

$

2,123

Adjustments:

Operating expenses (excluding depreciation and amortization expense reflected below)

838

740

2,389

2,197

Depreciation and amortization expense

397

391

1,179

1,154

Other operating expenses (e)

(9

)

2

25

9

Refining margin

$

6,472

$

2,073

$

13,072

$

5,483

Refining operating income

$

5,246

$

940

$

9,479

$

2,123

Adjustment: Other operating expenses (e)

(9

)

2

25

9

Adjusted Refining operating income

$

5,237

$

942

$

9,504

$

2,132

U.S. Mid-Continent region

Refining operating income

$

1,394

$

188

$

2,192

$

365

Adjustments:

Operating expenses (excluding depreciation and amortization expense reflected below)

225

210

632

605

Depreciation and amortization expense

86

84

264

238

Other operating expenses

1

3

4

3

Refining margin

$

1,706

$

485

$

3,092

$

1,211

Refining operating income

$

1,394

$

188

$

2,192

$

365

Adjustment: Other operating expenses

1

3

4

3

Adjusted Refining operating income

$

1,395

$

191

$

2,196

$

368

  See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RECONCILIATION OF NON-GAAP MEASURES TO MOST COMPARABLE AMOUNTS

REPORTED UNDER U.S. GAAP (h)

(millions of dollars)

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Reconciliation of Refining segment operating income (loss) to Refining margin (by region), and reconciliation of Refining segment operating income (loss) to adjusted Refining segment operating income (by region) (i) (continued)

North Atlantic region

Refining operating income

$

1,837

$

532

$

2,962

$

967

Adjustments:

Operating expenses (excluding depreciation and amortization expense reflected below)

213

199

616

553

Depreciation and amortization expense

77

80

241

224

Refining margin

$

2,127

$

811

$

3,819

$

1,744

U.S. West Coast region (f)

Refining operating income (loss)

$

305

$

(50

)

$

425

$

(1,109

)

Adjustments:

LIFO liquidation adjustment (a)

—

—

(44

)

—

Operating expenses (excluding depreciation and amortization expense reflected below) (c)

100

239

348

631

Depreciation and amortization expense (g)

20

173

263

413

Asset impairment loss (d)

—

—

—

1,131

Other operating expenses

—

—

5

1

Refining margin

$

425

$

362

$

997

$

1,067

Refining operating income (loss)

$

305

$

(50

)

$

425

$

(1,109

)

Adjustments:

LIFO liquidation adjustment (a)

—

—

(44

)

—

Employee retention and separation costs (c)

—

50

—

50

Asset impairment loss (d)

—

—

—

1,131

Other operating expenses

—

—

5

1

Adjusted Refining operating income

$

305

$

—

$

386

$

73

  See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per barrel amounts)

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Throughput volumes (thousand barrels per day)

Feedstocks:

Heavy sour crude oil

512

506

492

538

Medium/light sour crude oil

274

281

274

252

Sweet crude oil

1,594

1,661

1,572

1,577

Residuals

109

204

137

156

Other feedstocks

117

89

121

82

Total feedstocks

2,606

2,741

2,596

2,605

Blendstocks and other

366

346

350

342

Total throughput volumes

2,972

3,087

2,946

2,947

Yields (thousand barrels per day)

Gasolines and blendstocks

1,402

1,517

1,405

1,446

Distillates

1,162

1,201

1,146

1,130

Other products (j)

430

399

422

396

Total yields

2,994

3,117

2,973

2,972

Operating statistics (h) (k)

Refining margin

$

10,730

$

3,731

$

20,980

$

9,505

Adjusted Refining operating income

$

8,774

$

1,665

$

15,048

$

3,540

Throughput volumes (thousand barrels per day)

2,972

3,087

2,946

2,947

Refining margin per barrel of throughput

$

39.24

$

13.14

$

26.09

$

11.82

Less:

Adjusted operating expenses (excluding depreciation and amortization expense reflected below) per barrel of throughput

5.03

4.71

4.96

4.89

Depreciation and amortization expense per barrel of throughput

2.12

2.57

2.42

2.53

Adjusted Refining operating income per barrel of throughput

$

32.09

$

5.86

$

18.71

$

4.40

  See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

RENEWABLE DIESEL SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per gallon amounts)

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Operating statistics (h) (k)

Renewable Diesel margin

$

510

$

126

$

1,691

$

185

Renewable Diesel operating income (loss)

$

353

$

(28

)

$

1,209

$

(248

)

Sales volumes (thousand gallons per day)

3,423

2,717

3,429

2,629

Renewable Diesel margin per gallon of sales

$

1.62

$

0.50

$

1.81

$

0.26

Less:

Operating expenses (excluding depreciation and amortization expense reflected below) per gallon of sales

0.28

0.31

0.28

0.32

Depreciation and amortization expense per gallon of sales

0.22

0.30

0.24

0.28

Renewable Diesel operating income (loss) per gallon of sales

$

1.12

$

(0.11

)

$

1.29

$

(0.34

)

  See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

ETHANOL SEGMENT OPERATING HIGHLIGHTS

(millions of dollars, except per gallon amounts)

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Operating statistics (h) (k)

Ethanol margin

$

455

$

352

$

1,217

$

762

Ethanol operating income

$

272

$

183

$

680

$

257

Production volumes (thousand gallons per day)

4,799

4,635

4,695

4,562

Ethanol margin per gallon of production

$

1.03

$

0.83

$

0.95

$

0.62

Less:

Operating expenses (excluding depreciation and amortization expense reflected below) per gallon of production

0.37

0.35

0.38

0.36

Depreciation and amortization expense per gallon of production

0.04

0.05

0.04

0.05

Ethanol operating income per gallon of production

$

0.62

$

0.43

$

0.53

$

0.21

  See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS BY REGION

(millions of dollars, except per barrel amounts)

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Operating statistics by region (i)

U.S. Gulf Coast region (h) (k)

Refining margin

$

6,472

$

2,073

$

13,072

$

5,483

Adjusted Refining operating income

$

5,237

$

942

$

9,504

$

2,132

Throughput volumes (thousand barrels per day)

1,874

1,846

1,819

1,787

Refining margin per barrel of throughput

$

37.55

$

12.21

$

26.32

$

11.24

Less:

Operating expenses (excluding depreciation and amortization expense reflected below) per barrel of throughput

4.86

4.36

4.81

4.50

Depreciation and amortization expense per barrel of throughput

2.31

2.30

2.37

2.37

Adjusted Refining operating income per barrel of throughput

$

30.38

$

5.55

$

19.14

$

4.37

U.S. Mid-Continent region (h) (k)

Refining margin

$

1,706

$

485

$

3,092

$

1,211

Adjusted refining operating income

$

1,395

$

191

$

2,196

$

368

Throughput volumes (thousand barrels per day)

472

466

471

448

Refining margin per barrel of throughput

$

39.27

$

11.31

$

24.08

$

9.91

Less:

Operating expenses (excluding depreciation and amortization expense reflected below) per barrel of throughput

5.19

4.90

4.92

4.95

Depreciation and amortization expense per barrel of throughput

1.99

1.96

2.06

1.94

Adjusted refining operating income per barrel of throughput

$

32.09

$

4.45

$

17.10

$

3.02

  See Notes to Earnings Release.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

REFINING SEGMENT OPERATING HIGHLIGHTS BY REGION

(millions of dollars, except per barrel amounts)

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Operating statistics by region (i) (continued)

North Atlantic region (h) (k)

Refining margin

$

2,127

$

811

$

3,819

$

1,744

Refining operating income

$

1,837

$

532

$

2,962

$

967

Throughput volumes (thousand barrels per day)

507

516

506

468

Refining margin per barrel of throughput

$

45.58

$

17.10

$

27.64

$

13.65

Less:

Operating expenses (excluding depreciation and amortization expense reflected below) per barrel of throughput

4.58

4.20

4.46

4.33

Depreciation and amortization expense per barrel of throughput

1.64

1.70

1.75

1.75

Refining operating income per barrel of throughput

$

39.36

$

11.20

$

21.43

$

7.57

U.S. West Coast region (f) (h) (k)

Refining margin

$

425

$

362

$

997

$

1,067

Adjusted Refining operating income

$

305

$

—

$

386

$

73

Throughput volumes (thousand barrels per day)

119

259

150

244

Refining margin per barrel of throughput

$

38.81

$

15.22

$

24.39

$

16.00

Less:

Adjusted operating expenses (excluding depreciation and amortization expense reflected below) per barrel of throughput

9.10

7.94

8.50

8.72

Depreciation and amortization expense per barrel of throughput (g)

1.85

7.29

6.44

6.20

Adjusted Refining operating income (loss) per barrel of throughput

$

27.86

$

(0.01

)

$

9.45

$

1.08

  See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Refining

Feedstocks (dollars per barrel)

Brent crude oil

$

91.61

$

68.14

$

88.87

$

69.87

Brent less West Texas Intermediate (WTI) crude oil

5.37

3.11

5.06

3.08

Brent less WTI Houston crude oil

4.29

2.09

3.44

2.02

Brent less Dated Brent crude oil

(5.75

)

(0.91

)

(5.49

)

(0.91

)

Brent less Argus Sour Crude Index crude oil

6.07

3.46

4.71

2.68

Brent less Maya crude oil

13.37

7.14

10.97

8.35

Brent less Western Canadian Select Houston crude oil

16.49

6.93

14.66

6.81

WTI crude oil

86.24

65.03

83.81

66.79

Natural gas (dollars per million British thermal units)

2.47

2.70

2.68

2.97

Renewable volume obligation (RVO) (dollars per barrel) (l)

14.34

6.38

12.51

5.76

Product margins (RVO adjusted unless otherwise noted)

(dollars per barrel)

U.S. Gulf Coast:

Conventional Blendstock for Oxygenate Blending (CBOB) gasoline less Brent

24.08

7.78

14.17

6.78

Ultra-low-sulfur (ULS) diesel less Brent

72.27

21.05

47.80

17.51

Polymer Grade Propylene less Brent (not RVO adjusted)

(17.02

)

(8.22

)

(13.22

)

(3.07

)

U.S. Mid-Continent:

CBOB gasoline less WTI

34.16

12.79

17.87

12.32

ULS diesel less WTI

73.54

26.16

46.49

21.09

North Atlantic:

CBOB gasoline less Brent

33.46

14.58

20.56

10.97

ULS diesel less Brent

77.12

24.64

53.72

21.44

U.S. West Coast:

California Reformulated Gasoline Blendstock for Oxygenate Blending 87 gasoline less Brent

50.89

26.69

40.62

28.94

California Air Resources Board diesel less Brent

81.83

29.83

56.98

23.47

  See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

AVERAGE MARKET REFERENCE PRICES AND DIFFERENTIALS

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Renewable Diesel

New York Mercantile Exchange ULS diesel (dollars per gallon)

$

4.33

$

2.35

$

3.66

$

2.30

Biodiesel Renewable Identification Number (RIN) (dollars per RIN)

2.23

1.13

1.93

1.00

California Low-Carbon Fuel Standard carbon credit (dollars per metric ton)

80.60

53.36

71.43

57.30

U.S. Gulf Coast (USGC) used cooking oil (dollars per pound)

0.76

0.62

0.74

0.56

USGC distillers corn oil (dollars per pound)

0.77

0.64

0.76

0.58

USGC fancy bleachable tallow (dollars per pound)

0.75

0.62

0.73

0.56

Ethanol

Chicago Board of Trade corn (dollars per bushel)

4.78

4.02

4.53

4.42

New York Harbor ethanol (dollars per gallon)

2.10

1.96

1.97

1.87

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars)

(unaudited)

  September 30,

December 31,

2026

2025

Balance sheet data

Current assets

$

33,561

$

23,210

Cash and cash equivalents included in current assets

9,840

4,688

Inventories included in current assets

7,611

7,591

Current liabilities

19,469

14,109

Valero Energy Corporation stockholders’ equity

27,974

23,725

Total equity

31,084

26,605

Debt and finance lease obligations:

Debt –

Current portion of debt (excluding variable interest entities (VIEs))

$

727

$

672

Debt, less current portion of debt (excluding VIEs)

7,849

7,566

Total debt (excluding VIEs)

8,576

8,238

Current portion of debt attributable to VIEs

3

23

Total debt

8,579

8,261

Finance lease obligations –

Current portion of finance lease obligations (excluding VIEs)

233

228

Finance lease obligations, less current portion (excluding VIEs)

1,567

1,488

Total finance lease obligations (excluding VIEs)

1,800

1,716

Current portion of finance lease obligations attributable to VIEs

26

26

Finance lease obligations, less current portion attributable to VIEs

596

616

Total finance lease obligations attributable to VIEs

622

642

Total finance lease obligations

2,422

2,358

Total debt and finance lease obligations

$

11,001

$

10,619

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Reconciliation of net cash provided by operating activities to adjusted net cash provided by operating activities (h)

Net cash provided by operating activities

$

6,932

$

1,881

$

13,902

$

3,769

Exclude:

Changes in current assets and current liabilities

(526

)

325

(123

)

157

Diamond Green Diesel LLC’s (DGD) adjusted net cash provided by (used in) operating activities attributable to the other joint venture member’s ownership interest in DGD

205

(86

)

696

(239

)

Adjusted net cash provided by operating activities

$

7,253

$

1,642

$

13,329

$

3,851

  See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

EARNINGS RELEASE TABLES

OTHER FINANCIAL DATA

(millions of dollars, except per share amounts)

(unaudited)

  Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Reconciliation of capital investments to capital investments attributable to Valero (h)

Capital expenditures (excluding VIEs)

$

272

$

171

$

654

$

504

Capital expenditures of VIEs:

DGD

(3

)

4

4

67

Other VIEs

1

2

3

5

Deferred turnaround and catalyst cost expenditures (excluding VIEs)

155

187

529

808

Deferred turnaround and catalyst cost expenditures of DGD

7

45

40

91

Investments in nonconsolidated joint ventures

—

—

—

1

Capital investments

432

409

1,230

1,476

Adjustments:

DGD’s capital investments attributable to the other joint venture member

(2

)

(25

)

(22

)

(79

)

Capital expenditures of other VIEs

(1

)

(2

)

(3

)

(5

)

Capital investments attributable to Valero

$

429

$

382

$

1,205

$

1,392

Dividends per common share

$

1.20

$

1.13

$

3.60

$

3.39

  See Notes to Earnings Release Tables.

  VALERO ENERGY CORPORATION

NOTES TO EARNINGS RELEASE TABLES

(a)

Cost of materials and other for the nine months ended September 30, 2026 includes a benefit of $44 million resulting from the liquidation of certain LIFO inventory layers attributable to our Refining segment. Inventory levels for our West Coast refining operations decreased during 2026 due to the phased idling of processing units and cessation of refining operations at our Benicia Refinery, which was completed by the end of April 2026. Consequently, inventory levels at December 31, 2026 are expected to remain below those at December 31, 2025.

(b)

Taxes other than income taxes includes excise taxes on sales by certain of our foreign operations.

(c)

Operating expenses (excluding depreciation and amortization expense) for the three and nine months ended September 30, 2025 includes employee retention and separation costs of $50 million related to the Benicia Refinery. In connection with our plan to cease refining operations at the Benicia Refinery, we implemented a transition plan for eligible employees that included retention incentive payments and separation benefits.

(d)

In March 2025, we approved a plan to idle the processing units and cease refining operations at our Benicia Refinery by the end of April 2026. In addition, we considered strategic alternatives for our remaining operations in California. As a result, we evaluated the assets of the Benicia and Wilmington refineries for impairment as of March 31, 2025 and concluded that the carrying values of these assets were not recoverable. Therefore, we reduced the carrying values of the Benicia and Wilmington refineries to their estimated fair values and recognized a combined asset impairment loss of $1.1 billion in the nine months ended September 30, 2025.

(e)

Other operating expenses for the three and nine months ended September 30, 2026 includes $4 million and $19 million, respectively, of repair costs directly attributable to the March 2026 incident at our Port Arthur Refinery.

(f)

During the first quarter of 2026, we began idling the processing units through a phased approach and ceased operation of the fuel production units at our Benicia Refinery. In accordance with our plan, full idling of all processing units was completed in April 2026. Effective in the second quarter of 2026, activities associated with the decommissioning and redevelopment of our Benicia Refinery are reported within Corporate and Other.

(g)

Depreciation and amortization expense includes incremental depreciation expense of approximately $133 million in the nine months ended September 30, 2026 and approximately $100 million and $200 million in the three and nine months ended September 30, 2025, respectively, related to the Benicia Refinery. In connection with our phased plan to idle the processing units and cease refining operations at our Benicia Refinery, we shortened the estimated useful life of the refinery, and as a result, the revised carrying value of the refinery’s long-lived assets was depreciated to the estimated salvage value.

(h)

We use certain financial measures (as noted below) in the earnings release tables and accompanying earnings release that are not defined under GAAP and are considered to be non-GAAP measures.

We have defined these non-GAAP measures and believe they are useful to the external users of our financial statements, including industry analysts, investors, lenders, and rating agencies. We believe these measures are useful to assess our ongoing financial performance because, when reconciled to their most comparable GAAP measures, they provide improved comparability between periods after adjusting for certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These non-GAAP measures should not be considered as alternatives to their most comparable GAAP measures nor should they be considered in isolation or as a substitute for an analysis of our results of operations as reported under GAAP. In addition, these non-GAAP measures may not be comparable to similarly titled measures used by other companies because we may define them differently, which diminishes their utility.

Non-GAAP measures are as follows:

Adjusted net income attributable to Valero Energy Corporation stockholders is defined as net income attributable to Valero Energy Corporation stockholders adjusted to reflect the items noted below, along with their related income tax effect, as applicable. The income tax effect for the adjustments was calculated using a combined U.S. federal and state statutory rate of 22.5 percent. We have adjusted for these items because we believe that they are not indicative of our core operating performance and that their adjustment results in an important measure of our ongoing financial performance to better assess our underlying business results and trends. The basis for our belief with respect to each adjustment is provided below. LIFO liquidation adjustment – Generally, the LIFO inventory valuation method provides for the matching of current costs with current revenues. However, a LIFO liquidation results in a portion of our current-year cost of sales being impacted by historical costs, which obscures our current-year financial performance. Therefore, we have excluded the historical cost impact from adjusted net income attributable to Valero Energy Corporation stockholders. See note (a) for additional details. Employee retention and separation costs – The employee retention and separation costs related to the Benicia Refinery (see note (c)) are not indicative of our ongoing operations. Asset impairment loss – The asset impairment loss attributable to our Benicia and Wilmington refineries (see note (d)) is not indicative of our ongoing operations or our expectations about the profitability of our refining business. Port Arthur Refinery fire expenses – The expenses directly attributable to the March 2026 incident at our Port Arthur Refinery (see note (e)) are specific to that incident and are not indicative of our ongoing operations. Adjusted earnings per common share – assuming dilution is defined as adjusted net income attributable to Valero Energy Corporation stockholders divided by the number of weighted-average shares outstanding in the applicable period, assuming dilution. Refining margin is defined as Refining segment operating income (loss) excluding the LIFO liquidation adjustment (see note (a)), operating expenses (excluding depreciation and amortization expense), depreciation and amortization expense, the asset impairment loss (see note (d)), and other operating expenses. We believe Refining margin is an important measure of our Refining segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance. Renewable Diesel margin is defined as Renewable Diesel segment operating income (loss) excluding operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense. We believe Renewable Diesel margin is an important measure of our Renewable Diesel segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance. Ethanol margin is defined as Ethanol segment operating income excluding operating expenses (excluding depreciation and amortization expense) and depreciation and amortization expense. We believe Ethanol margin is an important measure of our Ethanol segment’s operating and financial performance as it is the most comparable measure to the industry’s market reference product margins, which are used by industry analysts, investors, and others to evaluate our performance. Adjusted Refining operating income is defined as Refining segment operating income (loss) excluding the LIFO liquidation adjustment (see note (a)), employee retention and separation costs (see note (c)), the asset impairment loss (see note (d)), and other operating expenses. We believe adjusted Refining operating income is an important measure of our Refining segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance. Adjusted Refining operating expenses (excluding depreciation and amortization expense) is defined as Refining segment operating expenses (excluding depreciation and amortization expense) excluding employee retention and separation costs (see note (c)). We believe adjusted Refining operating expense (excluding depreciation and amortization expense) is an important measure of our Refining segment’s operating and financial performance because it excludes items that are not indicative of that segment’s core operating performance. Adjusted Refining operating expenses (excluding depreciation and amortization expense) for the Refining segment and the U.S. West Coast region is calculated as follows (in millions): Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

Refining segment

Operating expenses (excluding depreciation and amortization expense)

$

1,376

$

1,388

$

3,985

$

3,986

Adjustment: Employee retention and separation costs

—

(50

)

—

(50

)

Adjusted operating expenses (excluding depreciation and amortization expense)

$

1,376

$

1,338

$

3,985

$

3,936

U.S. West Coast region

Operating expenses (excluding depreciation and amortization expense)

$

100

$

239

$

348

$

631

Adjustment: Employee retention and separation costs

—

(50

)

—

(50

)

Adjusted operating expenses (excluding depreciation and amortization expense)

$

100

$

189

$

348

$

581

Adjusted net cash provided by operating activities is defined as net cash provided by operating activities excluding the items noted below. We believe adjusted net cash provided by operating activities is an important measure of our ongoing financial performance to better assess our ability to generate cash to fund our investing and financing activities. The basis for our belief with respect to each excluded item is provided below. Changes in current assets and current liabilities – Current assets net of current liabilities represents our operating liquidity. We believe that the change in our operating liquidity from period to period does not represent cash generated by our operations that is available to fund our investing and financing activities. DGD’s adjusted net cash provided by (used in) operating activities attributable to the other joint venture member’s ownership interest in DGD – We are a 50 percent joint venture member in DGD and we consolidate DGD’s financial statements. Our Renewable Diesel segment includes the operations of DGD and the associated activities to market its products. Because we consolidate DGD’s financial statements, all of DGD’s net cash provided by (used in) operating activities (or operating cash flow) is included in our consolidated net cash provided by operating activities. In general, DGD’s members use DGD’s operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Nevertheless, DGD’s operating cash flow is effectively attributable to each member and only a portion of DGD’s operating cash flow should be attributed to our net cash provided by operating activities. Therefore, we have adjusted our net cash provided by operating activities for the portion of DGD’s operating cash flow attributable to the other joint venture member’s ownership interest because we believe that it more accurately reflects the operating cash flow available to us to fund our investing and financing activities. The adjustment is calculated as follows (in millions):

Three Months Ended
September 30,

Nine Months Ended
September 30,

2026

2025

2026

2025

DGD operating cash flow data

Net cash provided by (used in) operating activities

$

312

$

(263

)

$

551

$

(364

)

Exclude: Changes in current assets and current liabilities

(99

)

(90

)

(841

)

115

Adjusted net cash provided by (used in) operating activities

411

(173

)

1,392

(479

)

Other joint venture member’s ownership interest

50

%

50

%

50

%

50

%

DGD’s adjusted net cash provided by (used in) operating activities attributable to the other joint venture member’s ownership interest in DGD

$

205

$

(86

)

$

696

$

(239

)

Capital investments attributable to Valero is defined as all capital expenditures and deferred turnaround and catalyst cost expenditures presented in our consolidated statements of cash flows, excluding the portion of DGD’s capital investments attributable to the other joint venture member and all of the capital expenditures of VIEs other than DGD. In general, DGD’s members use DGD’s operating cash flow (excluding changes in its current assets and current liabilities) to fund its capital investments rather than distribute all of that cash to themselves. Because DGD’s operating cash flow is effectively attributable to each member, only 50 percent of DGD’s capital investments should be attributed to our net share of total capital investments. We also exclude the capital expenditures of other VIEs that we consolidate because we do not operate those VIEs. We believe capital investments attributable to Valero is an important measure because it more accurately reflects our capital investments.

(i)

The Refining segment regions reflected herein contain the following refineries: U.S. Gulf Coast- Corpus Christi East, Corpus Christi West, Houston, Meraux, Port Arthur, St. Charles, Texas City, and Three Rivers Refineries; U.S. Mid Continent- Ardmore, McKee, and Memphis Refineries; North Atlantic- Pembroke and Quebec City Refineries; and U.S. West Coast- Benicia and Wilmington Refineries. Effective in the second quarter of 2026, activities associated with the decommissioning and redevelopment of our Benicia Refinery are reflected within Corporate and Other.

(j)

Primarily includes petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, sulfur, and asphalt.

  (k)

We use certain operating statistics (as noted below) in the earnings release tables and the accompanying earnings release to evaluate performance between comparable periods. Different companies may calculate them in different ways.

All per barrel of throughput, per gallon of sales, and per gallon of production amounts are calculated by dividing the associated dollar amount by the throughput volumes, sales volumes, and production volumes for the period, as applicable.

Throughput volumes, sales volumes, and production volumes are calculated by multiplying throughput volumes per day, sales volumes per day, and production volumes per day (as provided in the accompanying tables), respectively, by the number of days in the applicable period. We use throughput volumes, sales volumes, and production volumes for the Refining segment, Renewable Diesel segment, and Ethanol segment, respectively, due to their general use by others who operate facilities similar to those included in our segments. We believe the use of such volumes results in per unit amounts that are most representative of the product margins generated and the operating costs incurred as a result of our operation of those facilities.

  (l)

The RVO cost represents the average market cost on a per barrel basis to comply with the Renewable Fuel Standard program. The RVO cost is calculated by multiplying (i) the average market price during the applicable period for the RINs associated with each class of renewable fuel (i.e., biomass-based diesel, cellulosic biofuel, advanced biofuel, and total renewable fuel) by (ii) the quotas for the volume of each class of renewable fuel that must be blended into petroleum-based transportation fuels consumed in the U.S., as set or proposed by the U.S. Environmental Protection Agency, on a percentage basis for each class of renewable fuel and adding together the results of each calculation.

More News From Valero Energy Corporation

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

Even though momentum is a popular stock characteristic, it can be tough to define. Debate surrounding which are the best and worst metrics to focus on is lengthy, but the Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Valero Energy (VLO - Free Report) , a company that currently holds a Momentum Style Score of A. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.

It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Valero Energy currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market? In order to see if VLO is a promising momentum pick, let's examine some Momentum Style elements to see if this oil refiner holds up.

Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.

For VLO, shares are up 2.53% over the past week while the Zacks Oil and Gas - Refining and Marketing industry is up 2.84% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 14.92% compares favorably with the industry's 7.58% performance as well.

While any stock can see its price increase, it takes a real winner to consistently beat the market. That is why looking at longer term price metrics -- such as performance over the past three months or year -- can be useful as well. Over the past quarter, shares of Valero Energy have risen 45.01%, and are up 174.86% in the last year. In comparison, the S&P 500 has only moved 3.92% and 15.74%, respectively.

Investors should also pay attention to VLO's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. VLO is currently averaging 2,817,341 shares for the last 20 days.

Earnings OutlookThe Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with VLO.

Over the past two months, 8 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost VLO's consensus estimate, increasing from $40.62 to $52.55 in the past 60 days. Looking at the next fiscal year, 8 estimates have moved upwards while there have been no downward revisions in the same time period.

Bottom LineGiven these factors, it shouldn't be surprising that VLO is a #1 (Strong Buy) stock and boasts a Momentum Score of A. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Valero Energy on your short list.

President Donald Trump announced an $8 billion Harvest Fuel Relief payment to farmers this harvest season to offset rising diesel costs and other increased input expenses amid disruptions to the global energy supply caused by attacks from Iran and its terrorist proxies in the Middle East.

"And some more goodies — you know, I always heard that when you're president, you have a little bit of an advantage, and I sort of see why now, actually, I sort of see why: Tonight, I'm also pleased to announce that the Department of Agriculture will be launching a new Harvest Fuel Relief program, providing our farmers with $8 billion in support to offset diesel costs during this harvest season," Trump said at a rally at the Heartland Credit Union Arena in Park City, Kansas, near Wichita, stumping for Sen. Roger Marshall, R-Kan.

"And Roger Marshall is the leader who fought for that to happen. Roger got it to happen. Good job, Roger."

USDA CREDITS TRUMP TRADE DEALS AS AGRICULTURAL DEFICIT SHRINKS, FARM SECTOR GAINS GROUND

Sen. Roger Marshall, R-Kan., lobbied for the $8 billion diesel inflation bailout for farmers, according to President Donald Trump, who announced it at Monday night's midterm campaign rally. (Julia Demaree Nikhinson/AP / AP Images)

Trump compared this farmer bailout fund to the $12 billion Farmer Bridge Assistance (FBA) program given earlier this year and the total of $28 billion given to farmers in his first administration, including $12 billion before the 2018 midterms.

"And when the Republicans win, we will pass even more funding for our farmers," Trump continued. "We love our farmers.

"I just gave the farmers $12 billion, and in my first term, I gave them $28 billion, if you remember. And that came out of the tariff money from China. China paid it. It was a gift from China."

DEMOCRATS REVOLT OVER TRUMP ADMIN'S $20B AID PLAN, CITING US FARM CRISIS

The USDA announced the $8 billion Harvest Fuel Relief program will provide proportional support based on modeled losses during the 2026 crop year. Payments will be calculated using planted acres, production-cost estimates, yields and prices.

Commodity-specific payment rates for major crops are expected to be released in November. The program will be administered by the Farm Service Agency and funded through the Commodity Credit Corporation Charter Act.

Trump also highlighted a recent executive order waiving the off-road requirement for red-dyed diesel, allowing farmers and truckers to purchase the fuel tax-free.

HOW MUCH DID TRADE WAR RELIEF COST DURING TRUMP'S FIRST TERM?

Ticker Security Last Change Change % VLO VALERO ENERGY CORP. 433.31 -11.40 -2.56% MPC MARATHON PETROLEUM CORP. 473.69 -4.38 -0.92% CVX CHEVRON CORP. 224.37 -0.62 -0.28% PSX PHILLIPS 66 290.55 -2.62 -0.89% XOM EXXONMOBIL HOLDINGS CORP. 178.28 -0.70 -0.39% "Even without that, as soon as that war ends, you're going to see a plunge because there's so much oil and diesel around," Trump said.

The USDA said the program follows $12 billion in bridge payments distributed to more than 560,000 farmers earlier this year and nearly $14 billion in recent Agriculture Risk Coverage and Price Loss Coverage payments.

"President Trump is the most pro-farmer president of my lifetime, and he is continuing to put farmers first every day," Agriculture Secretary Brooke Rollins wrote in a statement Monday. "Today, I am proud to announce alongside President Trump more targeted relief is coming to our farmers through the Harvest Fuel Relief program. This $8 billion dollar investment will help bring certainty to our farmers during this harvest so they can continue to feed our nation."

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Rollins, posting the rally announcement on X, hailed the move as "delivering critical support to farmers facing rising costs and market disruptions."

"President Trump is putting FARMERS FIRST and delivering when they need it most!" she wrote.

CWA Asset Management Group LLC increased its stake in shares of Valero Energy Corporation (NYSE:VLO – Free Report) by 8.7% during the third quarter, according to its most recent filing with the SEC. The institutional investor owned 20,186 shares of the oil and gas company’s stock after purchasing an additional 1,608 shares during the period. CWA Asset Management Group LLC’s holdings in Valero Energy were worth $7,824,000 as of its most recent SEC filing.

A number of other institutional investors have also added to or reduced their stakes in the stock. Cornerstone Financial Management LLC increased its position in shares of Valero Energy by 57.6% during the second quarter. Cornerstone Financial Management LLC now owns 104 shares of the oil and gas company’s stock valued at $27,000 after buying an additional 38 shares during the period. Whipplewood Advisors LLC boosted its position in shares of Valero Energy by 3,400.0% in the first quarter. Whipplewood Advisors LLC now owns 105 shares of the oil and gas company’s stock valued at $26,000 after acquiring an additional 102 shares during the period. Financial Life Planners bought a new position in shares of Valero Energy in the first quarter valued at approximately $28,000. Valued Wealth Advisors LLC grew its stake in Valero Energy by 134.0% during the first quarter. Valued Wealth Advisors LLC now owns 117 shares of the oil and gas company’s stock valued at $29,000 after acquiring an additional 67 shares in the last quarter. Finally, Global Assets Advisory LLC purchased a new position in Valero Energy during the first quarter valued at approximately $33,000. Hedge funds and other institutional investors own 78.69% of the company’s stock.

Wall Street Analysts Forecast Growth A number of analysts recently weighed in on VLO shares. Weiss Ratings raised shares of Valero Energy from a “buy (b)” rating to a “buy (b+)” rating in a report on Thursday, October 8th. Raymond James Financial raised their price target on shares of Valero Energy from $350.00 to $450.00 and gave the company a “strong-buy” rating in a report on Monday, September 14th. TD Cowen raised their price target on shares of Valero Energy from $338.00 to $350.00 and gave the company a “hold” rating in a report on Monday, August 3rd. Morgan Stanley boosted their price target on shares of Valero Energy from $255.00 to $411.00 and gave the company an “equal weight” rating in a research report on Monday, September 14th. Finally, Mizuho upped their price target on shares of Valero Energy from $300.00 to $434.00 and gave the stock a “neutral” rating in a report on Thursday, October 8th. Two research analysts have rated the stock with a Strong Buy rating, nine have assigned a Buy rating, eight have issued a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, the company has a consensus rating of “Moderate Buy” and a consensus price target of $382.62.

Read Our Latest Report on VLO Valero Energy Stock Performance NYSE:VLO opened at $433.02 on Tuesday. The stock has a market cap of $124.68 billion, a P/E ratio of 18.35, a PEG ratio of 0.29 and a beta of 0.59. The company has a quick ratio of 1.23, a current ratio of 1.64 and a debt-to-equity ratio of 0.37. The business’s 50-day moving average price is $385.50 and its two-hundred day moving average price is $305.39. Valero Energy Corporation has a twelve month low of $156.26 and a twelve month high of $461.52.

Valero Energy (NYSE:VLO – Get Free Report) last issued its quarterly earnings data on Thursday, July 30th. The oil and gas company reported $12.54 EPS for the quarter, topping the consensus estimate of $10.11 by $2.43. Valero Energy had a return on equity of 26.74% and a net margin of 5.17%. The company had revenue of $44.48 billion during the quarter, compared to analyst estimates of $39.47 billion. During the same quarter in the previous year, the firm earned $2.28 earnings per share. Valero Energy’s revenue was up 48.8% on a year-over-year basis. As a group, equities analysts predict that Valero Energy Corporation will post 51.77 EPS for the current fiscal year.

Valero Energy Company Profile (Free Report)

Valero Energy Corporation is an international energy company headquartered in San Antonio, Texas. The company’s primary business is refining and marketing transportation fuels, including gasoline, diesel, jet fuel and other products used by commercial, industrial and consumer customers.

Valero operates refineries in the United States, Canada and the United Kingdom. Its refining operations also produce asphalt, petrochemical feedstocks and other petroleum-based products. The company markets fuel through wholesale channels and branded retail networks, including Valero, Beacon and Shamrock-branded locations.

In addition to conventional refining, Valero has businesses focused on renewable fuels.

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Key Takeaways Valero Energy is set to report Q3 earnings on Oct. 22, with EPS expected to surge 480.1% to $21.23.Supply disruptions, tight refined product markets and low inventories are expected to support VLO's margins.VLO's 190% stock rally and 9.4X EV/EBITDA valuation highlight its premium despite rising crude costs.
Valero Energy Corporation (VLO - Free Report) is set to report third-quarter 2026 results on Oct. 22, before the market opens.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $21.23 per share, implying a 480.1% surge from the year-ago reported number. VLO has witnessed three upward and one downward earnings estimate revision over the past 30 days. The Zacks Consensus Estimate for third-quarter revenues is currently pinned at $38.8 billion, suggesting a 20.6% rise from the year-ago actuals.

VLO beat the consensus estimate for earnings in each of the trailing four quarters, delivering an average surprise of 26.8%.

This is depicted in the graph below:  

Image Source: Zacks Investment Research

Valero Energy’s Q3 Earnings WhispersOur proven model does not conclusively predict an earnings beat for VLO this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.

The company has an Earnings ESP of -0.32% and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Factors to Consider for VLOValero Energy is expected to have delivered a stable performance in the third quarter, driven by high refining margins. Refining margins are likely to have remained elevated in the third quarter due to continued tensions and supply disruptions in the Middle East, which tightened refined product markets. In addition, attacks on Russian refining facilities and infrastructure further constrained refining capacity, amplifying the tightness in refined product markets. Moreover, low global light-product inventories are expected to have supported refining fundamentals. These factors are likely to have supported refining gains and aided VLO’s profitability.

However, the company’s performance is likely to have been tempered by elevated crude prices earlier in the third quarter. Per the data from the U.S. Energy Information Administration, the West Texas Intermediate (“WTI”) spot crude price averaged $80.46 per barrel in July and $83.90 per barrel in August, further increasing to $97.31 per barrel in September. Notably, these figures are significantly higher than those recorded in the corresponding period of 2025. Higher crude prices are expected to raise input costs for its refining operations, thereby affecting its results. These factors are likely to have affected demand and pricing dynamics, potentially hampering the company’s quarterly performance.

VLO’s Price Performance & ValuationVLO’s stock has soared 190% over the past year compared with the 157.7% rise of the composite stocks belonging to the industry. PBF Energy (PBF - Free Report) and Par Pacific Holdings (PARR - Free Report) , two other leading refining players, have gained 213.6% and 145.9%, respectively.

Image Source: Zacks Investment Research

VLO appears relatively overvalued, at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 9.4X, above the broader industry average of 6.48X, implying that the stock is currently trading at a premium. PBF Energy and Par Pacific are currently trading at a trailing 12-month EV/EBITDA of 5.82X and 3.51X, respectively.

Image Source: Zacks Investment Research

Investment Thesis of Valero EnergyValero Energy is among the largest independent refiners in the United States, having a combined high-complexity throughput capacity of nearly 3 million barrels per day across its refineries. VLO’s Gulf Coast refining network provides it with feedstock sourcing flexibility and access to high-demand export markets to sell its refined products.

Moreover, its advanced refineries can process various kinds of feedstock, including Venezuelan and Canadian crude. These heavy crude grades generally trade at a discount to the WTI benchmark, owing to their high sulfur content, thereby lowering input costs. Additionally, the operational flexibility of its refineries enables VLO to shift product yields toward high-demand, higher-margin products and optimize its crude slate, allowing the company to better capitalize on tighter global refined-product markets.

Valero also boasts a strong financial and liquidity position, with a net debt-to-capitalization ratio of 11% at the end of the second quarter. Furthermore, VLO holds $7.9 billion of cash and cash equivalents, along with $5.3 billion of available liquidity under its bank facilities. VLO’s healthy financial position also allows it to return excess cash to investors through share buybacks. However,  the refining industry is inherently cyclical and volatile, with margins and crack spreads depending largely on crude oil prices and overall demand for refined petroleum products, which may result in earnings volatility.

PBF and PARR: Refining Stocks to Gain From the Current Market Environment?PBF Energy has a geographically diverse refining network with large-scale processing capacity and a highly complex refining system. It operates six refineries — Delaware City Refinery, Paulsboro Refinery, Toledo Refinery, Chalmette Refinery, Torrance Refinery and Martinez Refinery— with a combined throughput capacity of 1 million barrels per day and the ability to process a wide range of feedstocks. The diversified refining footprint provides the company with exposure to several regional refining markets, supporting higher margins.

Par Pacific Holdings operates an integrated downstream energy business across the United States, with fuel retail operations in Hawaii, Washington and Idaho; refining operations in Hawaii, Wyoming, Washington and Montana; a cumulative refining capacity of 219,000 barrels per day; and a supporting logistics network. Its logistics network includes 13 million barrels of storage, along with marine and pipeline assets for transportation. The commercial flexibility of its downstream network allows the company to capitalize on changing market conditions to support profitability.

Both PBF and PARR currently carry a Zacks Rank #1. The refining players are expected to benefit from strong refining fundamentals and elevated crack spreads driven by continued supply disruptions through the Strait of Hormuz and low refined product inventories.

Final VerdictVLO is expected to have benefited from strong refining fundamentals, which are currently supported by the disruptions in supply through the Strait of Hormuz. Low product inventories are also expected to have supported refining margins in the near term. Given the business environment and its healthy financial position, investors should consider buying the VLO stock, sporting a Zacks Rank #1, at present.

Valero Energy (VLO - Free Report) closed at $444.06 in the latest trading session, marking a -3.42% move from the prior day. This change lagged the S&P 500's daily gain of 0.33%. Meanwhile, the Dow gained 1.08%, and the Nasdaq, a tech-heavy index, added 0.08%.

Shares of the oil refiner witnessed a gain of 14.01% over the previous month, beating the performance of the Oils-Energy sector with its gain of 5.67%, and the S&P 500's gain of 1.41%.

The investment community will be paying close attention to the earnings performance of Valero Energy in its upcoming release. The company is slated to reveal its earnings on October 22, 2026. The company is forecasted to report an EPS of $21.23, showcasing a 480.05% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $38.8 billion, indicating a 20.62% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $51.77 per share and a revenue of $152.87 billion, representing changes of +387.94% and +24.6%, respectively, from the prior year.

Investors should also take note of any recent adjustments to analyst estimates for Valero Energy. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 6.57% higher. Currently, Valero Energy is carrying a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that Valero Energy has a Forward P/E ratio of 8.88 right now. This expresses a premium compared to the average Forward P/E of 8.76 of its industry.

It's also important to note that VLO currently trades at a PEG ratio of 0.29. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Oil and Gas - Refining and Marketing industry stood at 0.29 at the close of the market yesterday.

The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 4, which puts it in the top 2% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Wall Street expects a year-over-year increase in earnings on higher revenues when Valero Energy (VLO - Free Report) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 22. On the other hand, if they miss, the stock may move lower.

While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.

Zacks Consensus EstimateThis oil refiner is expected to post quarterly earnings of $21.23 per share in its upcoming report, which represents a year-over-year change of +480.1%.

Revenues are expected to be $38.8 billion, up 20.6% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 11.29% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for Valero Energy?For Valero Energy, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%.

On the other hand, the stock currently carries a Zacks Rank of #1.

So, this combination makes it difficult to conclusively predict that Valero Energy will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that Valero Energy would post earnings of $9.87 per share when it actually produced earnings of $12.54, delivering a surprise of +27.05%.

Over the last four quarters, the company has beaten consensus EPS estimates four times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Valero Energy doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Market players energetically bought into Valero Energy (VLO +4.69%) on the second trading day of the week. A key reason for this was a very substantial price target raise on the stock by an analyst at a high-profile American bank. Buoyed by that positive development, Valero's stock closed the day nearly 5% higher.

Fueling a rallyThe prognosticator in question was Citigroup's (C -5.60%)Vikram Bagri, who upped his fair value assessment on Valero to $485 per share -- quite some distance above his previous level of $302. Perhaps somewhat surprisingly, despite the heavy lift, he maintained his neutral recommendation on the mid- and downstream energy stock.

Image source: Getty Images.

It wasn't immediately clear why Bagri decided to make the change, but Valero has seen numerous price target increases in recent days and weeks.

Several peers at large U.S. banks enacted hikes, including Bank of America's (BAC -1.14%) Jean Ann Salisbury. Early in October, she adjusted her Valero price target to $414 per share from $395. According to reports, she waxed bullish about positive developments in the company's long-term refinery capture and widening discounts in heavy crude oil.

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What goes up must...The recent price target changes were largely due to a surge in Valero's stock price to an all-time high. This alone would make me wary of the stock, despite Valero's impressive recent increases in "crack spreads" (i.e., refining profit margins) and its numerous competitive advantages, such as relatively low costs. This is a cyclical industry, and it feels we're very much at the top of a cycle. I believe there's more downside potential than upside with this stock.

dBank of America is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Last week, gasoline was clocking in at about $4.40 a gallon nationally. Diesel came in at around $6.37, up from just $3.70 a year ago. Yet West Texas Intermediate crude oil had fallen to roughly $90 a barrel after reaching $119 in March.

Now, if crude oil were the whole story, those numbers wouldn't make much sense. But the bigger problem right now isn't necessarily finding oil. It's turning that oil into gasoline, diesel, and jet fuel -- and certain companies are benefiting most.

The bottleneck is at the refinery Crude oil doesn't go directly from an oil well into your gas tank. It first has to be processed through a refinery, where it's converted into gasoline, diesel, jet fuel, and other products. And right now, global refining capacity is tight.

Image source: Getty Images.

The U.S. had 130 operable refineries at the beginning of 2026. Total operable distillation capacity stood at approximately 18.2 million barrels per day, down more than 250,000 barrels per day from a year earlier. Two refinery closures during 2025 removed roughly 400,000 barrels per day of capacity, with smaller expansions elsewhere offsetting part of the decline.

Globally, the situation has become even tighter. Attacks on Russian refineries have reduced supplies of refined products, while disruptions in the Persian Gulf have restricted shipments of fuels such as diesel and jet fuel. More recently, Chinese refiners suspended exports of oil products to destinations outside Hong Kong and Macao, putting additional pressure on already-tight global fuel supplies. That's why crude prices can fall while fuel prices remain elevated.

JPMorgan Chase recently estimated that Persian Gulf oil exports were only about 11% below pre-war levels. Refined-product exports, however, remained approximately 42% below normal. Indeed, there's plenty of crude moving around. The shortage is increasingly about what happens after the crude leaves the barrel.

Refiners are making a lot more money You can see the impact in refining margins. Look at Marathon Petroleum (MPC -0.45%), for instance. Its refining and marketing margin reached $36.33 per barrel during the second quarter, up from $17.58 a year earlier. Refining and marketing adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped from $1.9 billion to $6.7 billion. Marathon's refineries were running at 94% utilization and processing approximately 2.9 million barrels per day.

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Valero Energy (VLO -0.15%) is seeing the same trend. Its refining business generated $4.5 billion in operating income during Q2, up from $1.3 billion a year earlier. Refinery throughput averaged approximately 3 million barrels per day. Those numbers explain exactly why you shouldn't automatically assume higher fuel prices mean oil producers are capturing all the upside. There's no doubt about it. The value of refining crude into usable products has increased dramatically.

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Diesel could keep the pressure on Overall, diesel may be the biggest issue. U.S. diesel inventories recently fell to their lowest level for this time of year since records began in 1982, and the Energy Information Administration expects distillate inventories to fall below 100 million barrels and remain unusually low through the end of 2026.

That's especially problematic heading into fall and winter. Diesel demand typically increases during harvest season, while heating oil demand rises as temperatures fall. Refineries can shift their production mix somewhat, but there's a limit to how much gasoline, diesel, and jet fuel they can produce from each barrel of crude.

The result is a bottleneck that can't be fixed simply by pumping more oil. Yes, oil producers still benefit from elevated crude prices. But Marathon and Valero, for instance, are sitting directly at the point where today's supply constraints are most severe.

Of course, fuel prices could fall if disrupted refining capacity returns, global inventories rebuild, or demand weakens. Governments are already releasing emergency fuel inventories in an effort to ease the shortage.

But right now, the biggest energy shortage is still refining capacity. And as long as gasoline, diesel, and jet fuel remain scarce relative to crude, companies that can turn millions of barrels of oil into those products every day, such as Marathon Petroleum and Valero Energy, could remain among the biggest beneficiaries.

Key Takeaways VLO trades at 8.95x EV/EBITDA versus the industry's 6.07x, but its fundamentals justify the premium.Access to cheaper heavy crude and constrained global refining capacity support VLO's refining margins.VLO gained 161.8% over the past year, backed by a strong balance sheet and upward estimate revisions. Valero Energy Corporation (VLO - Free Report) is currently considered expensive on a relative basis, with the stock trading at an 8.95x trailing 12-month Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA), which is a premium compared with the broader industry average of 6.07x. Two other refiners, Phillips 66 (PSX - Free Report) and Par Pacific Holdings, Inc. (PARR - Free Report) , are currently trading at 12.02x trailing 12-month EV/EBITDA and 3.59x trailing 12-month EV/EBITDA, respectively.

Image Source: Zacks Investment Research

Is the premium valuation justified? Before making investment decisions, one should consider the company's overall business environment and fundamentals.

VLO's Advantageous Position in Heavy Crude Aids It

The Middle East tensions are driving crude oil prices higher, with West Texas Intermediate (“WTI”) trading above $90 per barrel, according to data from Oilprice.com. The high crude price has significantly increased input costs for refiners such as VLO, PSX and PARR. However, unlike many refiners, Valero Energy has a heavy crude advantage, as heavy crude is cheaper than light crude like WTI.

Regarding the company’s access to diverse crude feedstocks, Valero has an advantage because its Gulf Coast refineries can buy crude oil from many low-cost sources, including the United States, Canada and Venezuela. This gives the company more flexibility to purchase cheaper oil, which helps keep refining costs low and can boost profits when competitors have fewer sourcing options.

Constrained Global Refining Capacity is a Boon for VLO?

Global refining capacity is constrained and fuel inventories are low. On the demand side, gasoline, diesel and jet fuel remain resilient. This means people are still driving and flying quite often, while diesel demand suggests transportation, freight, agriculture and industrial activity are still holding up. As a result, with busy refineries and fuel not in abundant supply, refining margins for refiners are quite strong.

With crude prices likely to remain high, investors shouldn’t allocate their money only to exploration and production companies but also to refining players like VLO, even though high crude prices have been increasing refiners’ input costs.

Strong Balance Sheet Provides Support for VLO

The leading refining company ended the June quarter of 2026 with a net debt-to-capitalization of just 11%.  It added $2.1 billion to its cash balance during the June quarter, making its financial position even stronger. It also reported $5.3 billion of available liquidity excluding cash, providing significant financial flexibility.

Thus, the company can lean on its balance sheet to combat an uncertain business environment, reflecting its relatively stable business model compared to other players with a weaker balance sheet.

Time to Bet on the Stock?

Valero, with 14 refineries and a combined throughput capacity of roughly 3 million barrels per day, has witnessed upward earnings estimate revisions for 2026 over the past seven days.

Image Source: Zacks Investment Research

All the positive developments are getting reflected in the price chart. Over the past year, VLO jumped 161.8%, outperforming PARR’s 138% surge and PSX’s 107.2% gain. Thus, considering the business backdrop, it’s worth paying a premium for VLO stock, which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Image Source: Zacks Investment Research

Valero Energy (VLO - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this oil refiner have returned +9%, compared to the Zacks S&P 500 composite's +1.4% change. During this period, the Zacks Oil and Gas - Refining and Marketing industry, which Valero Energy falls in, has gained 8.7%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

For the current quarter, Valero Energy is expected to post earnings of $18.15 per share, indicating a change of +395.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +38.8% over the last 30 days.

The consensus earnings estimate of $50.07 for the current fiscal year indicates a year-over-year change of +371.9%. This estimate has changed +21.7% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $45.38 indicates a change of -9.4% from what Valero Energy is expected to report a year ago. Over the past month, the estimate has changed +45.5%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Valero Energy is rated Zacks Rank #1 (Strong Buy).

Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

For Valero Energy, the consensus sales estimate for the current quarter of $38.54 billion indicates a year-over-year change of +19.8%. For the current and next fiscal years, $152.18 billion and $144.69 billion estimates indicate +24% and -4.9% changes, respectively.

Last Reported Results and Surprise HistoryValero Energy reported revenues of $44.48 billion in the last reported quarter, representing a year-over-year change of +48.8%. EPS of $12.54 for the same period compares with $2.28 a year ago.

Compared to the Zacks Consensus Estimate of $35.95 billion, the reported revenues represent a surprise of +23.73%. The EPS surprise was +27.05%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Valero Energy is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Valero Energy. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.

In the latest trading session, Valero Energy (VLO - Free Report) closed at $424.10, marking a +1.16% move from the previous day. This move outpaced the S&P 500's daily loss of 0.22%. On the other hand, the Dow registered a loss of 0.66%, and the technology-centric Nasdaq decreased by 0.22%.

Coming into today, shares of the oil refiner had gained 9.5% in the past month. In that same time, the Oils-Energy sector gained 2.42%, while the S&P 500 gained 1.4%.

Market participants will be closely following the financial results of Valero Energy in its upcoming release. The company plans to announce its earnings on October 22, 2026. In that report, analysts expect Valero Energy to post earnings of $17.92 per share. This would mark year-over-year growth of 389.62%. At the same time, our most recent consensus estimate is projecting a revenue of $38.54 billion, reflecting a 19.81% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $49.86 per share and a revenue of $152.18 billion, demonstrating changes of +369.93% and +24.04%, respectively, from the preceding year.

Any recent changes to analyst estimates for Valero Energy should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 21.15% upward. Valero Energy presently features a Zacks Rank of #1 (Strong Buy).

In the context of valuation, Valero Energy is at present trading with a Forward P/E ratio of 8.41. For comparison, its industry has an average Forward P/E of 8.88, which means Valero Energy is trading at a discount to the group.

Meanwhile, VLO's PEG ratio is currently 0.28. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Oil and Gas - Refining and Marketing was holding an average PEG ratio of 0.28 at yesterday's closing price.

The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 5, which puts it in the top 3% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Have you been paying attention to shares of Valero Energy (VLO - Free Report) ? Shares have been on the move with the stock up 13.1% over the past month. The stock hit a new 52-week high of $421.98 in the previous session. Valero Energy has gained 157.6% since the start of the year compared to the 31.4% move for the Zacks Oils-Energy sector and the 139.1% return for the Zacks Oil and Gas - Refining and Marketing industry.

What's Driving the Outperformance?The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 30, 2026, Valero Energy reported EPS of $12.54 versus consensus estimate of $9.87.

For the current fiscal year, Valero Energy is expected to post earnings of $49.71 per share on $152.18 in revenues. This represents a 368.52% change in EPS on a 24.04% change in revenues. For the next fiscal year, the company is expected to earn $45.53 per share on $144.69 in revenues. This represents a year-over-year change of -8.41% and -4.92%, respectively.

Valuation MetricsWhile Valero Energy has moved to its 52-week high over the past few weeks, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

Valero Energy has a Value Score of B. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 8.4X current fiscal year EPS estimates, which is not in-line with the peer industry average of 8.8X. On a trailing cash flow basis, the stock currently trades at 19.4X versus its peer group's average of 11.6X. Additionally, the stock has a PEG ratio of 0.28. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks RankWe also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Valero Energy currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Valero Energy passes the test. Thus, it seems as though Valero Energy shares could still be poised for more gains ahead.

How Does VLO Stack Up to the Competition?Shares of VLO have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Marathon Petroleum Corporation (MPC - Free Report) . MPC has a Zacks Rank of #1 (Strong Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of A.

Earnings were strong last quarter. Marathon Petroleum Corporation beat our consensus estimate by 22.11%, and for the current fiscal year, MPC is expected to post earnings of $61.31 per share on revenue of $154.8 billion.

Shares of Marathon Petroleum Corporation have gained 11.5% over the past month, and currently trade at a forward P/E of 7.07X and a P/CF of 19.84X.

The Oil and Gas - Refining and Marketing industry is in the top 8% of all the industries we have in our universe, so it looks like there are some nice tailwinds for VLO and MPC, even beyond their own solid fundamental situation.

Momentum investing revolves around the idea of following a stock's recent trend in either direction. In "long context," investors will be essentially be "buying high, but hoping to sell even higher." With this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving that way. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.

While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.

Below, we take a look at Valero Energy (VLO - Free Report) , which currently has a Momentum Style Score of B. We also discuss some of the main drivers of the Momentum Style Score, like price change and earnings estimate revisions.

It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Valero Energy currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.

You can see the current list of Zacks #1 Rank Stocks here >>>

Set to Beat the Market?Let's discuss some of the components of the Momentum Style Score for VLO that show why this oil refiner shows promise as a solid momentum pick.

A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.

For VLO, shares are up 4.94% over the past week while the Zacks Oil and Gas - Refining and Marketing industry is up 3.45% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 9.6% compares favorably with the industry's 3.3% performance as well.

While any stock can see a spike in price, it takes a real winner to consistently outperform the market. Shares of Valero Energy have increased 44.75% over the past quarter, and have gained 153.3% in the last year. In comparison, the S&P 500 has only moved 2.73% and 15.47%, respectively.

Investors should also pay attention to VLO's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. VLO is currently averaging 3,835,143 shares for the last 20 days.

Earnings OutlookThe Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with VLO.

Over the past two months, 7 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost VLO's consensus estimate, increasing from $39.19 to $49.17 in the past 60 days. Looking at the next fiscal year, 6 estimates have moved upwards while there have been 1 downward revision in the same time period.

Bottom LineTaking into account all of these elements, it should come as no surprise that VLO is a #1 (Strong Buy) stock with a Momentum Score of B. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep Valero Energy on your short list.

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Valero Energy (VLO - Free Report) , which belongs to the Zacks Oil and Gas - Refining and Marketing industry.

When looking at the last two reports, this oil refiner has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 32.26%, on average, in the last two quarters.

For the last reported quarter, Valero Energy came out with earnings of $12.54 per share versus the Zacks Consensus Estimate of $9.87 per share, representing a surprise of 27.05%. For the previous quarter, the company was expected to post earnings of $3.07 per share and it actually produced earnings of $4.22 per share, delivering a surprise of 37.46%.

Price and EPS Surprise

With this earnings history in mind, recent estimates have been moving higher for Valero Energy. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its nice Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Valero Energy currently has an Earnings ESP of +13.47%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #1 (Strong Buy) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on October 22, 2026.

When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.

Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.

Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

Here are three stocks with buy ranks and strong growth characteristics for investors to consider today October 2nd:

Valero Energy (VLO - Free Report) : This company, which is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products, carries a Zacks Rank #1 (Strong Buy), and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 25.5% over the last 60 days.

Valero Energy has a PEG ratio of 0.26 compared with 0.34 for the industry. The company possesses a Growth Score of A.

monday.com (MNDY - Free Report) : This company, which provides an open platform which democratizes the power of software so organizations can easily build software applications and work management tools to fit their every need, carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 22.5% over the last 60 days.

monday.com has a PEG ratio of 0.75 compared with 3.36 for the industry. The company possesses a Growth Score of B.

Motorsport Games (MSGM - Free Report) : This company, which is a racing game developer, publisher and esports ecosystem provider of official motorsport racing series, carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 30.4% over the last 60 days.

Motorsport Games has a PEG ratio of 0.65 compared with 0.84 for the industry. The company possesses a Growth Score of B.

See the full list of top ranked stocks here.

Learn more about the Growth score and how it is calculated here.

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What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.

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Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

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How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

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As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

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Stock to Watch: Valero Energy (VLO - Free Report) Valero Energy Corporation, through its subsidiaries, is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products. The company is headquartered in San Antonio, TX. It was founded in 1980 and is one of the largest independent refiners and marketers of petroleum products in the United States.

VLO is a #1 (Strong Buy) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. VLO has a Growth Style Score of A, forecasting year-over-year earnings growth of 363.4% for the current fiscal year.

For fiscal 2026, seven analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $9.98 to $49.17 per share. VLO boasts an average earnings surprise of +26.8%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, VLO should be on investors' short list.

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.

Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

#1 (Strong Buy) stocks have produced an unmatched +23.8% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.

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The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

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Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Valero Energy (VLO - Free Report) Valero Energy Corporation, through its subsidiaries, is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products. The company is headquartered in San Antonio, TX. It was founded in 1980 and is one of the largest independent refiners and marketers of petroleum products in the United States.

VLO is a #1 (Strong Buy) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 7.89; value investors should take notice.

Seven analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $9.98 to $49.17 per share. VLO boasts an average earnings surprise of +26.8%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, VLO should be on investors' short list.

Valero Energy (VLO - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Shares of this oil refiner have returned +10.5% over the past month versus the Zacks S&P 500 composite's +0.7% change. The Zacks Oil and Gas - Refining and Marketing industry, to which Valero Energy belongs, has gained 6.6% over this period. Now the key question is: Where could the stock be headed in the near term?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Valero Energy is expected to post earnings of $18.09 per share, indicating a change of +394.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +20.6% over the last 30 days.

For the current fiscal year, the consensus earnings estimate of $49.17 points to a change of +363.4% from the prior year. Over the last 30 days, this estimate has changed +21%.

For the next fiscal year, the consensus earnings estimate of $43.21 indicates a change of -12.1% from what Valero Energy is expected to report a year ago. Over the past month, the estimate has changed +48.1%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Valero Energy is rated Zacks Rank #1 (Strong Buy).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

In the case of Valero Energy, the consensus sales estimate of $38.54 billion for the current quarter points to a year-over-year change of +19.8%. The $152.18 billion and $144.69 billion estimates for the current and next fiscal years indicate changes of +24% and -4.9%, respectively.

Last Reported Results and Surprise HistoryValero Energy reported revenues of $44.48 billion in the last reported quarter, representing a year-over-year change of +48.8%. EPS of $12.54 for the same period compares with $2.28 a year ago.

Compared to the Zacks Consensus Estimate of $35.95 billion, the reported revenues represent a surprise of +23.73%. The EPS surprise was +27.05%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Valero Energy is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Valero Energy. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.