Valero’s stock performance
Valero Energy (VLO) announced its results on October 25, 2016, before the markets opened. The stock received a strong opening, likely because its earnings surpassed analysts’ estimates. VLO opened at $57.3 per share, higher than its previous close of $56.2. Valero (VLO) saw highs of $59.5 and lows of $56.5 during the day. Eventually, VLO closed at $58.9, 4.9% higher than its previous day’s close.
On October 26, 2016, crude oil and natural gas fell 1.1% and 2%, respectively. VLO’s peers Tesoro (TSO), Phillips 66 (PSX), and HollyFrontier (HFC) rose 1.1%, 0.21%, and 1.2%, respectively, on the day. The iShares Russell 1000 Value ETF (IWD) has ~14% exposure to energy sector stocks.
VLO’s 3Q16 update
Valero’s capex for the third quarter stood at $453 million. Valero expects its capex to be around $2.4 billion in 2016, around $200 million less than what it projected in its earlier guidance. Valero also raised $1.3 billion in 3Q16 via a debt issue.
Valero’s management reiterated its emphasis on the growth of its logistics segment by completing its dropdown target for 2016. Valero sold its Meraux and Three Rivers terminal assets to its master limited partnership Valero Energy Partners (VLP) during the quarter.
Discussing the sale, Joe Gorder, Valero’s chair, president, and CEO, stated, “We were pleased to see continued growth in VLP through drop downs and incremental organic projects at VLP. Logistics investments are an important part of our strategy to grow and optimize Valero’s supply chain.”