Source: Getty

Valero Expected to Post $17.6 Billion in Earnings, Stock Falls After Rating Downgrade



Valero stock fell 7 percent on Oct. 1 after a Goldman Sachs analyst downgraded it due to competitive pressure and dividend concerns. The company will likely report its third-quarter earnings results on Oct. 22. Wall Street analysts expect the company to report sales of $17.6 billion for the third quarter.

Article continues below advertisement

What is Valero's stock news?

On Oct. 1, Goldman Sachs analyst Neil Mehta downgraded Valero stock to sell from neutral. The analyst also decreased his target price on the stock from $48 to $37. The analyst sees a significant downside to the 2021 estimates. According to TheFly, “The analyst is concerned about global refining fundamentals weighing on the company's margins given capacity additions, unfavorable crude differentials and lower refining utilization rates.” Mehta also cautioned investors about the company’s dividend payment sustainability amid balance sheet pressure.

Source: istock
Article continues below advertisement

What is Valero Energy?

Valero Energy is focused on oil and gas refining, marketing, and bulk selling activities. The company an independent petroleum refining and ethanol producing firm in the U.K., Canada, the U.S., Ireland, and internationally. Valero operates through three divisions — Ethanol, Refining, and Valero Energy Partners.

Article continues below advertisement

When is Valero's earnings call?

Valero will likely report its third-quarter earnings results on Oct. 22 before the markets open. The company has scheduled a conference call on the same day at 10:00 a.m. ET.

In the third quarter, analysts expect Valero to report revenue of $17.58 billion, which would be 35.5 percent lower than $27.25 billion in revenue in the third quarter of 2019. Analysts expect Valero to report an EPS of -$0.96 in the third quarter, which represents a significant fall year-over-year from $1.48.

Source: istock
Article continues below advertisement

What is Valero’s stock price today?

Valero stock was down about 1.1 percent at $39.83 in pre-market trading on Oct. 2 as of this article's writing. The stock fell 7 percent on Oct. 1 and closed at $40.28 with a market capitalization of $16.4 billion. Valero stock has fallen by 8.3 percent in the last five days and 52.3 percent in the last year.

Valero stock is trading 60.5 percent below its 52-week high of $101.99 and 29.9 percent above its 52-week low of $31.00. Year-to-date, the stock had fallen by 57 percent as of Oct. 1.

What is Valero's stock forecast?

Currently, analysts' stock price forecast for Valero is $68.50, which suggests a 70 percent upside. The highest target price of $85 implies a 111 percent upside, while the lowest target price of $50 suggests a 24.1 percent upside. Among the 21 Wall Street analysts who track Valero, 18 recommend a buy, two recommend a hold, and one recommends a sell.


More From Market Realist