Valero Energy’s Stock Price Forecast after Its Q4 Earnings


Feb. 4 2019, Updated 12:31 p.m. ET

Implied volatility

In the previous part, we discussed analysts’ ratings for Valero Energy (VLO). In this part, we’ll discuss the changes in Valero Energy’s implied volatility. We’ll also estimate Valero Energy’s stock price range for the eight days ending February 8.

Valero Energy reported its fourth-quarter earnings on January 31. On the same day, the implied volatility in Valero Energy fell by 4.8 percentage points compared to the previous day to 26.0%. The implied volatility was lower than the 30-day average implied volatility, which stood at 35.7%. On the same day, Valero Energy’s stock price rose 5.5%. Valero Energy’s stock price and its implied volatility moved inversely on January 31.

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Expected price range

Considering Valero Energy’s implied volatility of 26.0% and assuming a normal distribution of prices (bell curve model) and standard deviation of one (with a probability of 68.2%), Valero Energy’s stock price could close between $91.2 and $84.4 per share in the next eight days after its earnings ending on February 8.

Peers’ implied volatility

The implied volatility in PBF Energy (PBF) and HollyFrontier (HFC) increased by 0.1 percentage points each to 37.7% and 36.7%, respectively, on January 31. The implied volatility in Delek US Holdings (DK) rose by 0.8 percentage points over the previous day to 43.1% on January 31.

If we consider these refiners’ stock prices, then PBF Energy, HollyFrontier, and Delek US Holdings rose 3.3%, 0.8%, and 0.9%, respectively, on January 31.


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