Valero Energy’s Short Interest Has Risen before Its Earnings



Short interest

The short interest in Valero Energy (VLO) has risen from 1.6% of the outstanding shares on March 14 to the current level of 2.1%. Usually, an increase in the short interest implies a rise in the bearish sentiment for a stock. During the same period, Valero Energy stock has fallen 0.8%.

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What has impacted Valero Energy’s sentiments?

The rise in the short interest in Valero Energy could be due to an anticipated fall in its earnings in the first quarter. Analysts expect Valero Energy’s earnings to fall 58% YoY to $0.42 per share in the first quarter. Valero Energy’s crack indicators fell in the first quarter in three of its four operating regions, which points to a likely decline in the company’s refining margin and earnings in the quarter. Usually, the first quarter is a weak period for refiners.

The short interest in Phillips 66 (PSX), HollyFrontier (HFC), and Marathon Petroleum (MPC) has risen by 0.09 percentage points, 0.92 percentage points, and 0.31 percentage points since March 14.

Before Valero Energy’s earnings

Valero Energy is expected to post its first-quarter earnings on April 25. Analysts expect Valero Energy’s earnings to fall in the first quarter.

Valero Energy stock has risen slightly in the past month due to stronger cracks in March. Analysts expect Valero Energy’s dividend payments to stay stable sequentially to $0.90 per share in the second quarter. The company raised its dividend payment in the first quarter.

Analysts have lowered Valero Energy’s target prices. However, most of the analysts are positive on the stock due to its financials and growth activities. The short interest in Valero Energy has risen before its earnings likely due to the expectation of weaker first-quarter earnings.


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