Valero Energy Corp

The EIA (US Energy Information Administration) estimates that US gasoline demand rose 1.5% to 9.6 MMbpd (million barrels per day) in May 2017 compared to May 2016.

Phillips 66’s 90-day daily beta stands at 1.1, which is below its peer average of 1.5.

Valero’s crack indicators have fallen in all of these areas in May 2017 (as of May 23) as compared to April 2017.

Refiners’ cash flows have turned volatile over the past few quarters due to volatile refining earnings.

MPC’s valuations are above the peer averages likely because it’s now in the process of restructuring its organization to unlock value.

Tesoro (TSO) has been rated by 18 analysts. Of those, 12 have assigned the stock a “buy” or “strong buy” rating.

Tesoro (TSO) posted its 1Q17 results on May 8, 2017. Revenues missed analysts’ estimate, but adjusted EPS of $0.55 surpassed the estimate of $0.31.

After its earnings, Phillips 66 was rated by 19 analysts. Four analysts gave it a “buy,” 15 gave it a “hold,” and no analysts gave it a “sell.”

The implied volatility of Valero Energy (VLO) stock now stands at 24%. This level is equal to VLO’s 30-day average implied volatility.

Of the 21 analysts covering Valero Energy (VLO), 12 (57%) analysts have assigned “buy” or “strong buy” ratings, while nine (43%) have assigned “hold” ratings.

The correlation coefficient between VLO and WTI stands at 0.08.

Valero Energy (VLO) has witnessed a rise in its short interest since mid-February 2017.

VLO’s mean price target of $72 per share implies around a 10% gain from its current level.

Refining stocks’ implied volatilities have witnessed falls in 1Q17. Marathon Petroleum’s (MPC) implied volatility fell 7% to 27.9% from January 2 to March 31, 2017.

In this article, we’ll compare Tesoro’s (TSO) PEG ratio (price-to-earnings to blended growth rate) to those of its peers. We’ve considered the mean estimate of PEG.

Thirteen out of the 18 analysts covering Tesoro (TSO) have rated it as a “buy” so far in March 2017. Another five analysts have rated TSO as a “hold.”

Phillips 66’s (PSX) 90-day beta stood at 1.2 on March 16, 2017, below its peer average of 2.1.

Fifteen out of the 19 analysts covering Phillips 66 (PSX) rated it as a “hold” in March 2017. Another four analysts rated PSX as a “buy” or a “strong buy.”

Marathon Petroleum’s refining earnings are impacted by the blended LLS 6-3-2-1 crack, the sweet-sour differential, and the LLS-WTI spread.

Marathon Petroleum’s implied volatility currently stands at 28%—the highest level among peers Valero, Tesoro, and Phillips 66.

On March 2, 2017, Marathon Petroleum’s 90-day beta stood at 2.0—the highest among peers Valero, Tesoro, and Phillips 66.

Tesoro (TSO) posted its 4Q16 results on February 6, 2017. It reported revenues of $6.6 billion, which missed Wall Street analysts’ estimates.

The correlation coefficient of Valero (VLO) and WTI stands at 0.15. The correlation value for Valero’s stock and oil price show that they have a positive but feeble correlation.

After MPC proposed the dropdown plan, MPC’s forward price-to-earnings (or PE) and EV-to-EBITDA stood at 15.7x and 8x, respectively.

Now, let’s analyze the refining margin indicators published by Valero Energy (VLO). These indicators point toward VLO’s likely margin trend in 4Q16.

Marathon Petroleum’s (MPC) implied volatility currently stands at 37%, the highest among its peers.

After Elliott Management’s recommendations, Marathon Petroleum’s forward EV-to-EBITDA multiple stood at 23.1x.

The key factors influencing refining profitability include refining capacity, complexity, and utilization rates.

The Gulf Coast, a key US refining region, accounted for 9.6 MMbpd of total refining capacity, which represents 52% of the total refining strength in the US.

Eight of the 11 firms rated Valero as a “buy,” “overweight,” or “outperform,” with a high 12-month price target of $73, indicating a potential 35% gain.

Refiners such as PSX, MPC, VLO, and TSO are now focusing on diversifying their earnings models to shield themselves from the volatile refining environment.

Since the end of June, Marathon Petroleum’s (MPC) stock has risen by 28%. MPC has crossed over its 50-day and its 200-day moving averages during this period.

The analysts’ survey shows that six out of the 11 companies surveyed rated HollyFrontier (HFC) as “neutral” or “market perform.”

Nine out of ten companies surveyed rated Valero (VLO) a “buy,” “overweight,” or “outperform.”

Valero Energy (VLO) announced its results on July 26, 2016, before the market opened.

Wall Street analysts expect HollyFrontier to post EPS of $0.35, which is 76% lower than its 2Q15 adjusted EPS.

Western Refining (WNR) recorded a fall in gross refining margins, from $16.80 per barrel in 1Q15 to $10.80 per barrel in 1Q16.

The correlation value for Valero stock and the price of oil shows they have a positive but feeble correlation. Valero stock moves in line with WTI prices only to a certain extent.

Valero’s diesel crack indicators have been rising in 2Q16 compared to 1Q16. The US West Coast, where VLO has 0.3 MMbpd refining capacity, saw the largest rise of $3.20 per barrel.

Amid stock price volatility, Valero rose 20% from February 8–March 28, 2016, and crossed over its 50-day and 200-day moving averages.

The correlation value of Phillips 66 (PSX) and crude oil prices shows that the price of PSX stock moves in line with WTI prices to a certain extent.

Phillips 66 (PSX) has segments in refining, midstream, chemicals, and marketing. In 1Q16, the refining segment contributed $86 million, or 24%, to its adjusted net income.

The correlation coefficient of Western Refining versus WTI and Brent stands at -0.53 and -0.64, respectively.

US on-highway diesel fuel prices rose by 2% and were at $2.02 per on March 7, 2016. The current diesel prices are 46% lower than they were a year ago.

Natural gas is used as heating fuel in 48% of the homes across the country, electricity is used for heat in 38% of homes, and the rest of the fuels are used for heat in the remaining 14% of homes.

The recent rise in the crack spread is driven by factors like low crude oil prices, a rise in demand for gasoline, and a sharp rise in demand for propane.

Crude oil and the US Dollar Index are inversely related. The appreciation of the US dollar will negatively influence crude oil prices.

August WTI crude oil futures contracts fell by $0.74 and closed at $50.15 per barrel on July 20. Brent fell by $0.45 and settled at $56.65 at the close of trade.

The Energy Select Sector SPDR ETF (XLE) rose 0.22% in the week to June 26. The ETF tracks a diverse group of ~45 of the largest US energy stocks.

Shell Midstream Partners (SHLX) has a 42% ownership in the Zydeco pipeline, and Shell Pipeline Company, or SPLC, owns the remaining 57% interest.