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What this page is: Delvantic's full research page for Valero Energy Corporation (VLO) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-10-08): Designation Low · Gem Score -33 (−100…+100 Quality+Value blend) · Quality 18 · Value -67 · Sentiment 10 (timing only, not weighted) · Composite fair value $412.77 vs $314.95 at analysis
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profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
price-history,income-trend,key-metrics,financials(statement tables),insider-trading. The analysis above is public; the raw data tables require a free account.
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every model, score, lens read, and prediction on this page is Delvantic's own analysis.
Valero Energy Corporation
VLO NYSEValero Energy Corporation is an American energy company that focuses on manufacturing and marketing transportation fuels and petrochemical products. Headquartered in San Antonio, Texas and founded in 1980, Valero operates an extensive network of petroleum refineries, ethanol plants, and renewable diesel facilities across the United States, Canada, the United Kingdom and other international markets. The company’s core products include gasoline, diesel, jet fuel, distillates, asphalt and various petrochemicals, serving wholesale, retail, industrial and commercial customers in multiple regions. Valero’s business is organized into three main segments: Refining, Renewable Diesel and Ethanol, reflecting its presence in both traditional hydrocarbons and lower-carbon liquid fuels. Through these segments, Valero plays a significant role in global fuel supply chains, converting crude oil and other feedstocks into essential energy products that support transportation, industry and everyday economic activity. Its scale and integrated logistics make Valero one of the most prominent independent refiners and fuel manufacturers in the energy market today.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 7.57
Total Equity: $26.61B
Shares: 309,000,000
Total Debt: $9.21B
Cash: $4.69B
EBITDA: $6.34B
Total Debt: $9.21B
Cash: $4.69B
Revenue: $122.69B
Revenue: $122.69B
Revenue: $122.69B
Total Equity: $26.61B
Tax Rate: 25.3%
Equity: $26.61B
Total Debt: $9.21B
Cash: $4.69B
Current Liabilities: $14.11B
Long-Term Debt: $8.26B
Total Debt: $9.21B
Total Equity: $26.61B
Shares: 309,000,000
Shares: 309,000,000
CapEx: $0.00
Shares: 309,000,000
Stock Price: $312.09
Net Income: $2.35B
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 9, 2026 4:05am (60d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $114.0B | $176.4B | $144.8B | $129.9B | $122.7B |
| Cost of Revenue | $110.8B | $159.6B | $131.8B | $125.1B | $117.3B |
| Gross Profit | $3.1B | $16.8B | $12.9B | $4.8B | $5.4B |
| Operating Expenses | $999.0M | $1.1B | $1.1B | $1.1B | $2.3B |
| Operating Income | $2.1B | $15.7B | $11.9B | $3.8B | $3.2B |
| Net Income | $930.0M | $11.5B | $8.8B | $2.8B | $2.3B |
| EBITDA | $4.5B | $18.2B | $14.6B | $6.5B | $6.3B |
| EPS | $2.27 | $29.05 | $24.93 | $8.58 | $7.57 |
| EPS (Diluted) | $2.27 | $29.04 | $24.92 | $8.58 | $7.57 |
Balance Sheet (Annual)
Last updated: Aug 6, 2026 7:41am (62d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $4.1B | $4.9B | $5.4B | $4.7B | $4.7B |
| Total Current Assets | $21.2B | $24.1B | $26.2B | $23.7B | $23.2B |
| Total Assets | $57.9B | $61.0B | $63.1B | $60.1B | $58.0B |
| Current Liabilities | $16.9B | $17.5B | $16.8B | $15.5B | $14.1B |
| Long-Term Debt | $12.0B | $9.2B | $9.2B | $8.1B | $8.3B |
| Total Liabilities | $38.1B | $35.5B | $34.5B | $32.6B | $31.4B |
| Total Equity | $19.8B | $25.5B | $28.5B | $27.5B | $26.6B |
| Retained Earnings | $28.3B | $38.2B | $45.6B | $47.0B | $48.0B |
Cash Flow (Annual)
Last updated: Aug 9, 2026 4:05am (60d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $5.9B | $12.6B | $9.2B | $6.7B | $5.8B |
| Capital Expenditure | -$2.5B | -$2.7B | -$1.9B | -$2.1B | — |
| Free Cash Flow | $3.4B | $9.8B | $7.3B | $4.6B | — |
| Acquisitions (net) | — | — | — | — | — |
| Net Debt Issued / (Repaid) | — | — | — | — | — |
| Dividends Paid | -$1.6B | -$1.6B | -$1.5B | -$1.4B | -$1.4B |
| Stock Buybacks | -$27.0M | -$4.6B | -$5.1B | -$2.9B | -$2.6B |
| Net Change in Cash | $809.0M | $740.0M | $562.0M | -$595.0M | $36.0M |
Growth Trends (YoY %)
Last updated: Aug 9, 2026 4:05am (60d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +54.8% | -17.9% | -10.3% | -5.5% |
| Gross Profit Growth | +436.8% | -23.0% | -62.8% | +13.0% |
| Operating Income Growth | +636.6% | -24.4% | -68.3% | -15.3% |
| Net Income Growth | +1,139.6% | -23.4% | -68.6% | -15.2% |
| EBITDA Growth | +300.5% | -19.8% | -55.2% | -2.9% |
Dividend History (Last 20)
Last updated: Aug 6, 2026 7:41am (62d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-07-31 | $1.20 | — | — | — |
| 2026-05-21 | $1.20 | — | — | — |
| 2026-02-05 | $1.20 | — | — | — |
| 2025-11-20 | $1.13 | — | — | — |
| 2025-07-31 | $1.13 | — | — | — |
| 2025-05-20 | $1.13 | — | — | — |
| 2025-01-30 | $1.13 | — | — | — |
| 2024-11-20 | $1.07 | — | — | — |
| 2024-08-01 | $1.07 | — | — | — |
| 2024-05-30 | $1.07 | — | — | — |
| 2024-01-31 | $1.07 | — | — | — |
| 2023-11-16 | $1.02 | — | — | — |
| 2023-08-02 | $1.02 | — | — | — |
| 2023-05-22 | $1.02 | — | — | — |
| 2023-02-13 | $1.02 | — | — | — |
| 2022-11-16 | $0.98 | — | — | — |
| 2022-08-03 | $0.98 | — | — | — |
| 2022-05-11 | $0.98 | — | — | — |
| 2022-02-02 | $0.98 | — | — | — |
| 2021-11-17 | $0.98 | — | — | — |
Deep Analysis
Risk : Reward — upside vs downside from this company's own quarters
Computed 2026-10-04 02:03A +1σ run of quarters pays +157%; a −1σ run costs 69%. Ratio 2.3:1 (μ 7.1%, σ 24.6% , 16 pairs).
Older method (repeat-worst-quarter): 49.0 : 1
| Case | Growth | Margin | Fair value | vs price ($314.95) |
|---|---|---|---|---|
| Bull — recovery | +24% | 17.3% | $1,860.62 | +491% |
| Base — stabilizes | +16% | 15.0% | $1,275.45 | +305% |
| Bear — keeps slipping | +8% | 12.8% | $846.35 | +169% |
| Stress — last quarter repeats | -2% | 5.7% | $283.40 | -10% |
| Upside — a +1σ run of quarters (v2) | +32% | 5.7% | $810.10 | +157% |
| Stress — a −1σ run of quarters (v2) | -18% | 3.1% | $97.75 | -69% |
Narrative Economics
market-narrative step).
Claude Reading
The most striking number in this file is the Q2 2026 print: $44.48B revenue and $3.72B net income at an 8.4% margin — that is not a trough quarter, that's a rip-your-face-off crack spread quarter. Sequential net income more than tripled from Q1 2026's $1.26B, and the trailing four quarters now sum to roughly $7.2B in net income, which puts a very different denominator under that headline 41x PE. On a Q2-annualized basis (~$14.9B NI) the stock trades at under 6x. The synthesis model is anchoring on stale trailing annual 2025 numbers ($2.35B NI, the worst year since 2021) and calling it overvalued at $313 with a $227 fair value — but the quarterly trajectory is screaming that 2026 earnings will crush 2025, and the market has clearly figured that out. That's why the stock is near highs despite "weak" TTM optics.
The synthesis, market-forces, and narrative modules are all effectively fighting the tape by using backward-looking margin data. "Value trap on cyclical recovery hopes" is a defensible frame when Q1 margins were 3.9% — it is much harder to defend when Q2 margins printed 8.4%, matching or exceeding what refiners saw in the 2022-2023 boom (2023 op margin was ~8.2%; 2022 was ~8.9%). The recovery isn't hoped-for; it's already in the P&L. Momentum stats showing -48.5% earnings CAGR and -5.5% revenue YoY are arithmetic artifacts of comparing against the 2022 peak and against a specific weak trailing window — they miss the QoQ inflection entirely. The rule-based classifier calling this "dividend income" at a 1.5% yield with a 60% payout ratio is also lazy; VLO is a cyclical cash-return machine, not an income vehicle.
The contrarian case against my own read: Q2 2026 could be the peak, not the new normal. Refining margins are notoriously mean-reverting, and one blowout quarter shouldn't be capitalized into forward multiples. Global refining capacity additions in Asia and the Middle East (Dangote, Al-Zour, Chinese teapots) are real and coming online; U.S. gasoline demand is structurally flat to declining; the LCFS credit crash has already gutted renewable diesel economics, and Valero's DGD JV is no longer the growth story it was pitched as in 2022. Balance sheet is fine but not fortress — $9.2B debt vs $4.7B cash, and $5.83B operating CF in 2025 with capex undisclosed here means FCF coverage of the ~$1.3B dividend + buybacks is tight in trough years. If Q2 was a Russia-sanctions/hurricane/maintenance-driven spike and Q3 reverts to $1B NI, the bear synthesis is right and $227 is where this trades. Insider activity isn't provided, which is a real gap — I'd want to know if management was selling into this print.
I partially dissent from the synthesis. The $227 DCF fair value assumes mid-cycle margins that Valero is currently earning well above, and the models are penalizing the stock for a trailing year that no longer describes the business. But I also don't think $312 is a screaming buy — it prices in Q2-like conditions persisting, which for a commodity refiner is a heroic assumption. Fair value on a normalized blend (weighting 2022-2026 average NI of ~$5B at a 12-14x cyclical multiple) lands closer to $260-290, which makes current price modestly rich but not the 28% overvaluation the synthesis claims. The right posture is fairly valued with a bearish skew: I would not chase here, I would trim into strength, and I would look to re-add on any margin-normalization pullback into the $240s. Anyone modeling this stock without weighting the Q2 2026 print is doing the wrong math; anyone extrapolating Q2 forward is doing dangerous math.
GPT Reading
At $312, the market is paying a premium multiple for a refiner whose reported earnings power is still far below what would justify that price on the current numbers. The cleanest way to see it is annualized run-rate versus valuation. The last four quarters of net income sum to about $5.2B, which already benefits from a very strong 2026-06 quarter at $3.72B; that still leaves the stock at roughly 16-17x trailing quarterly-run-rate earnings for a business that earned $11.5B in 2022, $8.8B in 2023, then only $2.8B in 2024 and $2.35B in 2025. That is not a stable compounding profile deserving a defensive multiple; it is a margin-driven commodity processor. The balance sheet is good enough — net debt only about $4.5B against $26.6B of equity, debt/equity 0.35, current ratio 1.65 — but financial strength is not the same as valuation support when P/E is 41x on the latest annual result, EV/EBITDA is 15.2x, and ROIC is just 7.6%. For a refiner, those are rich numbers unless one assumes a sustained earnings snapback.
The raw quarterly progression does show a snapback, but it also shows why the stock feels ahead of itself. Revenue climbed from $29.9B in 2025-06 to $44.5B in 2026-06, and net income swung from $714M to $3.72B, with margin expanding from 2.4% to 8.4%. That is a real recovery, not accounting noise. Yet one great quarter after a long stretch of 0.9% to 3.9% margins does not prove a new base level of profitability. Annual revenue fell from $176.4B in 2022 to $122.7B in 2025, while net income fell almost 80% from $11.53B to $2.35B. Even if 2026 is materially better, the stock price implies the market is capitalizing something closer to peak-to-upper-mid-cycle economics, not the still-fragile recovery actually shown in the statements. Operating cash flow of $5.83B in 2025 was solid relative to $2.35B of net income, but without capex disclosed here I cannot give full credit to cash generation, and refining is not a low-reinvestment business.
What stands out most is the disconnect between quality and return. Valero is not distressed, and that matters. It likely deserves to trade above the worst trough multiples because its leverage is modest and it has survived the downshift in margins without balance-sheet strain. But investors are paying 3.6x book for a business that generated 8.8% ROE in 2025 and 1.9% net margin. That spread only makes sense if returns on capital are about to normalize much higher and stay there for more than a quarter or two. Maybe that happens, but the evidence in the annual numbers says earnings have been mean-reverting downward from extraordinary years, not settling into a structurally improved plateau. I do not think the “dividend/income” framing is useful here either: the yield is only 1.5%, payout ratio is already about 60% on depressed annual earnings, and the investment case clearly rests on cyclical earnings recovery rather than current income.
The best argument against my bearish read is straightforward: refining is a terrible business to value off trough accounting earnings, and the latest two quarters may be signaling that 2025 was the trough. If the June quarter’s $3.72B net income is even directionally representative of a tighter global refining environment, then annualized earnings power moves back toward $10B+, at which point $85.9B of market cap is not crazy. The market could also be rewarding scarcity value: capacity discipline, geopolitical dislocations, and resilient fuel demand can keep crack spreads elevated longer than traditional cycle models expect. On that view, the 41x P/E is a meaningless artifact of trough-year earnings, and the right lens is normalized cash generation across the cycle. The strong operating cash flow, low net leverage, and rapid quarter-on-quarter margin rebound are the data points a bull should hammer.
I weigh that differently because I need more than one blockbuster quarter to underwrite a premium valuation in a structurally cyclical industry. To change my mind, I would want to see at least two more quarters with net margins holding above 6% and quarterly net income consistently above $2.5B, which would demonstrate that 2026-06 was not just a spike. I would also want evidence that 2026 full-year operating earnings can clear $8B again without balance-sheet deterioration. If that happens, $312 could be supportable. If instead margins slip back toward the 2%-4% range that dominated 2024-2025, this stock is priced too high by a wide margin and belongs much closer to the low-to-mid $200s.
Grok Reading
The numbers describe a classic refining cycle caught mid-snapback, not a structural re-rating. Valero earned $11.53B in 2022 and $8.84B in 2023, collapsed to $2.77B in 2024 and $2.35B in 2025 as crack spreads imploded, then violently reversed: the four quarters through mid-2026 delivered roughly $7.2B of net income, capped by a $3.72B print in Q2 2026 on $44.48B of revenue and an 8.4% net margin that looks more like peak-cycle 2022 than the 2–4% trough that defined 2024–25. Annual revenue has still shrunk from $176B to $123B, and multi-year CAGRs remain ugly (−7.9% sales, −48.5% earnings), so the recovery is real but incomplete and highly margin-driven. The trailing PE of 41× is an accounting artifact of the 2025 trough; on current TTM earnings the multiple compresses to roughly 12×, and on a $10B run-rate implied by H1 2026 it is high-single-digits. Balance sheet quality is not in dispute—$9.21B debt against $4.69B cash, 0.35 debt-to-equity, 1.65 current ratio—and operating cash flow of $5.83B easily funds the business. What the market is paying $312 and an $86B enterprise for is the assumption that elevated cracks persist.
That assumption is already in the price. At 15× EV/EBITDA, 3.6× book, and a 1.5% dividend yield with a 60% payout, there is no margin of safety if spreads normalize toward mid-cycle. Gross margin for full-year 2025 was only 4.4% and operating margin 2.6%; one blowout quarter does not rewrite the through-cycle economics of a commodity refiner facing gradual gasoline demand erosion. The valuation engine’s ~$227–243 fair value is directionally correct even if it is a bit harsh given the earnings inflection—my own anchor sits nearer $260–280 once the new run-rate is blended with realistic mid-cycle cracks. Above $300 the stock is pricing multi-year tightness, capital discipline, and transition skepticism simultaneously; that is a crowded, fragile narrative, not a discounted cash-flow bargain.
The strongest counter-argument is straightforward: TTM earnings have already re-rated into the $7B zone, the balance sheet can support aggressive buybacks and dividends through a normal downcycle, and global capacity discipline plus residual geopolitical friction could keep complex refining margins above the miserable 2024–25 trough for several more years. On that view, 11–12× recovering earnings with fortress leverage is not expensive for the best-in-class U.S. refiner, and the 41× headline multiple is simply noise. I weigh this less heavily because Q2’s $44.5B revenue and 8.4% margin look like a spike, not a new floor; paying peak-cycle prices for peak-cycle earnings has historically been how refining investors lose money, and nothing in the multi-year revenue decline or the thin full-year 2025 margins suggests the cycle has been repealed.
Two consecutive additional quarters of net income above $2B, or sustained crack indicators that imply mid-cycle earnings power above $7B rather than $4–5B, would force a re-rating toward fairly valued or better. Conversely, a swift fade back toward 3% net margins or a clear break in U.S. gasoline demand would confirm the overvaluation and push fair value back under $240.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Valero's mechanical quality picture is clean: accruals at -4.7% of assets, OCF/NI of 2.67x, Beneish M of -2.92, and an Altman Z of 5.29 all say reported earnings are cash-backed and there is no distress signal. FCF has stayed positive across a violent cycle (3.40B in 2021, peaking at 9.84B in 2022, and still 5.83B in 2025), and the company used that cash to shrink diluted shares from 407M to 309M, a -6.7% CAGR, with buybacks running roughly 30x SBC. Liquidity is adequate: 4.69B cash against modest net debt of -4.52B, which is a rounding error versus 5.83B annual FCF.
Verify before trusting this (5)
- Refining capacity utilization and turnaround schedule in 2025 10-K
- Debt maturity ladder and any near-term refinancing needs
- Renewable diesel (DGD) segment economics post-BTC changes
- Capex allocation between maintenance and growth/transition projects
- Dividend coverage assumptions in a sustained low-crack environment
The composite fair value sits at $243 and the signal-adjusted FV at $227, implying roughly 25-28% downside from $314.95. The DCF ($277) is the most generous method and still 12% below spot, while the EPV floor of $210 - which is the right anchor for a cyclical refiner - implies a third of the current price is essentially a cycle premium. Earnings quality is high so no haircut is warranted, and the business is Solid (score 18), which supports paying up to but not through mid-cycle intrinsic value.
Verify before trusting this (4)
- Current crack spread levels vs 10-year mid-cycle average - is Q4 margin guide normalizing?
- Renewable diesel segment EBITDA contribution and BTC/45Z credit assumptions in consensus
- Buyback pace vs FCF at mid-cycle earnings (not TTM peak) - is the return of capital sustainable through a downturn?
- Management commentary on 2025-2026 capacity additions industry-wide (supply discipline is the bull thesis)
The immediate pressure on VLO is positive: peer Marathon Petroleum just beat on strong refining margins and is up 18% in three months, which reinforces the 'refining margins stay elevated' story that VLO trades on. News flow highlights VLO's sizable buyback completion and solid Q2 print, keeping the cash-return narrative alive. The tape is risk-on and VIX is calm, which lets cyclicals hold gains rather than get sold on any wobble. With a low beta of 0.55, VLO is not whipped around by the macro tape; the dominant force here is sector-specific narrative and peer-group momentum, both currently pushing up. That said, the narrative is explicitly flagged as fragile and late-cycle, with the stock trading at a meaningful premium to mid-cycle fair value. Analyst tone in the news set is balanced-to-cautious (the 'finely balanced' framing on the buyback piece), and the archetype is cyclical-late-stage with low cult coefficient - meaning there is no fanatical bid to defend the name if crack spreads roll. Higher rates and a stretched market PE are background headwinds, but they hit high-beta story stocks harder than a 0.55-beta refiner throwing off cash. Net: a real but not decisive tailwind, riding a hot refining tape with a narrative that could crack if margins normalize.
Verify before trusting this (4)
- Crack spread trajectory into Q3 - any rollover flips the peer-momentum tailwind fast
- Whether sell-side target revisions post-Q2 skew up or stay flat (tone confirmation)
- Energy sector relative strength vs S&P - a rotation out of energy would hit VLO despite low beta
- Any renewable diesel margin commentary that reignites the transition-risk bear
This lens hasn't been run for this ticker yet.
When we made this prediction on Aug 11, 2026, VLO was $314.95. We expect it to be $282.00 by Feb 2027, and we consider it great value under $235.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 11, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.