What changed
$VLO — ADD 📊 | 6 MONTHS THESIS
🎯 Q1 2026 | Rev $32.4B | EPS $4.22 vs $3.16 🟢 | Margin 6.3%
💡 Consensus EPS of $3.16 was far below actual $4.22. The market likely prices in a cyclical peak, but Valero's operational improvements and project pipeline could sustain above-consensus earnings, leading to EPS upgrades and a higher justified multiple (14-16x vs. typical mid-cycle 10-12x).
📉 Reward/risk: 1.76:1
🏢 Business Quality: 7/10 - Valero is a top-tier independent refiner with diversified assets, strong returns on capital, and disciplined shareholder returns, though the business remains cyclical and capex-intensive.
📊 Valuation: fair — at $236.3, based on annualized Q1 EPS of ~$16.88, P/E is 14.0x, and estimated EV/EBITDA ~8.0x.
📊 Our read: ADD. Full analysis →
https://stockduty.xyz/s/VLO0621