What changed
$VLO — BUY 📊 | 6 MONTHS THESIS
🎯 Q1 2026 | Rev $32.4B | EPS $4.22 vs $3.16 🟢 | Margin 6.3%
💡 Consensus expects FY26 EPS of $29.43, implying a P/E of 8.9x, reflecting fears of a cyclical peak. We believe margins will stay higher for longer due to structural supply constraints (few refineries, limited capacity additions) and seasonal demand strength, supporting EPS above $32 and multiple expansion to 10x.
📉 Reward/risk: 2.2:1
🏢 Business Quality: 7/10 - Leading US refiner with diversified asset base, strong operational efficiency, and growing renewable diesel segment, but inherently cyclical margins.
📊 Valuation: cheap - relative to 5-year average forward P/E of 11x and current sector peers at 10-12x, VLO trades at 8.9x forward earnings.
📊 Our read: BUY. Full analysis →
https://stockduty.xyz/s/VLO0612