Valero Energy (VLO) Laps the Stock Market: Here's Why

Valero Energy (VLO) closed the most recent trading day at $370.69, moving +1.26% from the previous trading session. The stock's performance was ahead of the S&P 500's daily gain of 1.06%. Elsewhere, the Dow gained 1.18%, while the tech-heavy Nasdaq added 1.4%.

Coming into today, shares of the oil refiner had gained 21.07% in the past month. In that same time, the Oils-Energy sector gained 4.7%, while the S&P 500 gained 2.46%.

The investment community will be closely monitoring the performance of Valero Energy in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $15, reflecting a 309.84% increase from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $36.53 billion, up 13.55% from the year-ago period.

VLO's full-year Zacks Consensus Estimates are calling for earnings of $40.7 per share and revenue of $146.63 billion. These results would represent year-over-year changes of +283.6% and +19.52%, respectively.

Investors should also pay attention to any latest changes in analyst estimates for Valero Energy. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 3.85% higher. Currently, Valero Energy is carrying a Zacks Rank of #1 (Strong Buy).

With respect to valuation, Valero Energy is currently being traded at a Forward P/E ratio of 8.99. This indicates no noticeable deviation in contrast to its industry's Forward P/E of 8.99.

It's also important to note that VLO currently trades at a PEG ratio of 0.42. 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 0.34 at yesterday's closing price.

The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 20, putting it in the top 9% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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