Core Viewpoint - Valero Energy Corporation (VLO) is expected to report a significant decline in earnings and revenues for the fourth quarter of 2024, with challenges stemming from weaker global refinery margins and reduced demand for refined products [2][3][5]. Earnings Performance - In the last reported quarter, Valero's adjusted earnings were $1.14 per share, missing the Zacks Consensus Estimate of $1.29 due to a decline in refining throughput volumes [2]. - The Zacks Consensus Estimate for fourth-quarter earnings per share is $0.14, reflecting a 96.06% decline from the prior year's figure [2]. - The estimated revenue for the fourth quarter is $30.75 billion, indicating a 13.16% decline from the previous year [3]. Factors Influencing Performance - Valero is expected to have maintained stable performance due to high refinery utilization rates, despite a 10% drop in spot prices for West Texas Intermediate Crude, which may have reduced input costs [4]. - Weaker global refinery margins are anticipated due to declining demand for refined petroleum products amid a global economic slowdown, with crack spreads showing contraction compared to the previous quarter [5]. - Lower margins on gasoline and distillates, particularly in the U.S. Gulf Coast, alongside high inflation and increased competition, are likely to have negatively impacted Valero's profitability [6]. Earnings Expectations - The current model does not indicate an earnings beat for Valero, with an Earnings ESP of -21.93% and a Zacks Rank of 3 (Hold) [7].

Core Viewpoint - Valero Energy (VLO) has gained attention as one of the most searched stocks, with significant recent performance and earnings estimates influencing its future stock price [1][2]. Earnings Estimates - Valero Energy is expected to report earnings of $0.14 per share for the current quarter, reflecting a year-over-year decline of -96.1% [5]. - The consensus earnings estimate for the current fiscal year is $7.93, indicating a decrease of -68.2% from the previous year [5]. - For the next fiscal year, the earnings estimate is $8.01, showing a slight increase of +1.1% compared to the prior year [6]. - Over the last 30 days, the earnings estimates have decreased by -12.7% for the current quarter and -12.3% for the current fiscal year [5][6]. Revenue Growth Forecast - The consensus sales estimate for the current quarter is $30.75 billion, representing a year-over-year decline of -13.2% [9]. - For the current and next fiscal years, the sales estimates are $129.88 billion and $121.48 billion, indicating changes of -10.3% and -6.5%, respectively [9]. Last Reported Results and Surprise History - In the last reported quarter, Valero Energy generated revenues of $32.88 billion, down -14.4% year-over-year [10]. - The reported EPS was $1.14, compared to $7.49 a year ago, with a revenue surprise of -0.5% and an EPS surprise of -11.63% [11]. Valuation - Valero Energy is graded A in the Zacks Value Style Score, suggesting it is trading at a discount compared to its peers [15]. - The evaluation of valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) is essential for determining the stock's intrinsic value [12][13]. Zacks Rank - Valero Energy holds a Zacks Rank of 3 (Hold), indicating it may perform in line with the broader market in the near term [7][16].

Core Viewpoint - Valero Energy (VLO) is anticipated to report a significant year-over-year decline in earnings due to lower revenues, which could influence its near-term stock price depending on how actual results compare to consensus estimates [1][2]. Earnings Expectations - The upcoming earnings report is scheduled for January 30, 2025, with expectations of quarterly earnings at $0.14 per share, reflecting a year-over-year decrease of 96.1% [3]. - Revenues are projected to be $30.75 billion, down 13.2% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 12.71% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0%, suggesting no recent differing analyst views [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, with a strong predictive power for positive readings [7][8]. - Valero Energy's current Zacks Rank is 3, making it challenging to predict an earnings beat conclusively [11]. Historical Performance - In the last reported quarter, Valero Energy was expected to post earnings of $1.29 per share but delivered only $1.14, resulting in a surprise of -11.63% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [13]. Conclusion - While Valero Energy does not appear to be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [16].

Company Overview - Valero Energy (VLO) shares increased by 4.9% to $133.35 in the last trading session, with a higher-than-average trading volume, contrasting with a 1.5% loss over the past four weeks [1] - The company is part of the Zacks Oil and Gas - Refining and Marketing industry, which includes other companies like EnLink Midstream (ENLC) [4] Market Impact - The recent bullish trend in Valero's stock is attributed to new U.S. sanctions on Russian crude oil exports, which have disrupted global oil supply and led to a spike in oil prices [2] - Higher oil prices are expected to enhance margins for integrated refiners like Valero, as they can pass increased costs onto consumers through higher refined product prices [2] Earnings Expectations - Valero is projected to report quarterly earnings of $0.16 per share, reflecting a significant year-over-year decline of 95.5%, with revenues expected to be $30.43 billion, down 14.1% from the previous year [3] - The consensus EPS estimate for Valero has been revised 17.1% lower in the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] Industry Comparison - EnLink Midstream's consensus EPS estimate remains unchanged at $0.16, representing a year-over-year increase of 14.3%, and it also holds a Zacks Rank of 3 (Hold) [5]

Core Viewpoint - Brokerage recommendations, particularly for Valero Energy (VLO), may not be reliable indicators for investment decisions due to inherent biases and the misalignment of interests between brokerage firms and retail investors [2][4][16]. Brokerage Recommendation Trends - The average brokerage recommendation (ABR) for Valero Energy is 1.63, indicating a consensus leaning towards "Buy" [15]. - Out of 19 recommendations, 14 are classified as "Strong Buy," representing 73.7% of the total [8]. - Despite the positive ABR, studies suggest limited success of brokerage recommendations in predicting stock price increases [9]. Zacks Rank vs. ABR - The Zacks Rank, which is based on earnings estimate revisions, is a more reliable indicator of near-term stock performance compared to the ABR [10][18]. - The Zacks Consensus Estimate for Valero Energy has decreased by 1.8% over the past month, now standing at $8.24 [13]. - The Zacks Rank for Valero Energy is currently 5 (Strong Sell), indicating a negative outlook despite the favorable ABR [19]. Analyst Behavior and Market Impact - Analysts from brokerage firms tend to exhibit a strong positive bias in their recommendations, with a ratio of five "Strong Buy" to every "Strong Sell" [2]. - The vested interests of brokerage firms often lead to overly optimistic ratings that mislead investors [4][16].

Company Performance - Valero Energy (VLO) closed at $139.08, with a +0.38% change from the previous session, underperforming the S&P 500's daily gain of 0.56% [1] - Over the past month, Valero's shares have appreciated by 6.78%, outperforming the Oils-Energy sector's gain of 4.4% and the S&P 500's gain of 3.11% [1] Upcoming Financial Results - Valero Energy is expected to report EPS of $0.77, down 78.31% from the prior-year quarter, with quarterly revenue estimated at $32.06 billion, down 9.48% from the year-ago period [2] - For the entire fiscal year, earnings are predicted to be $8.92 per share and revenue at $131.15 billion, indicating changes of -64.18% and -9.4%, respectively, from the previous year [3] Analyst Estimates and Valuation - Recent changes to analyst estimates for Valero Energy suggest a changing business landscape, with positive revisions indicating optimism about the company's outlook [3] - The Zacks Rank system, which includes estimate changes, currently ranks Valero Energy at 3 (Hold) [5] - Valero Energy has a Forward P/E ratio of 15.53, which is lower than the industry average of 16.33, indicating it is trading at a discount [6] Industry Context - The Oil and Gas - Refining and Marketing industry has a Zacks Industry Rank of 208, placing it in the bottom 18% of all industries [8] - The average PEG ratio for Valero Energy is 2.59, matching the industry average [7]

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission File Number 001-13175 VALERO ENERGY CORPORATION (Exact name of registrant as specified in its charter) Delaw ...

Financial Data and Key Metrics - Net income attributable to Valero stockholders was $364 million or $1 14 per share in Q3 2024 compared to $2 6 billion or $7 49 per share in Q3 2023 [6] - Refining segment operating income was $565 million in Q3 2024 compared to $3 4 billion in Q3 2023 [6] - Refining throughput volumes averaged 2 9 million barrels per day with 90% capacity utilization in Q3 2024 [6] - Renewable Diesel segment operating income was $35 million in Q3 2024 compared to $123 million in Q3 2023 [7] - Ethanol segment operating income was $153 million in Q3 2024 compared to $197 million in Q3 2023 [7] - Net cash provided by operating activities was $1 3 billion in Q3 2024 [8] - Capital investments were $429 million in Q3 2024 with $338 million allocated to sustaining the business [9] - The company returned $907 million to stockholders in Q3 2024 with a payout ratio of 84% [10] Business Segment Performance - Refining cash operating expenses were $4 73 per barrel in Q3 2024 [6] - Renewable diesel sales volumes averaged 3 5 million gallons per day in Q3 2024 up 552 000 gallons per day year-over-year [7] - Ethanol production volumes averaged 4 6 million gallons per day in Q3 2024 up 255 000 gallons per day year-over-year [7] - The Diamond Green Diesel Sustainable Aviation Fuel (SAF) project is mechanically complete and in the process of starting up [4] Market Data and Key Metrics - U S wholesale volumes exceeded 1 million barrels per day for the second consecutive quarter [4] - Gasoline sales were flat year-over-year while diesel sales increased year-over-year [16] - Gasoline exports in Q3 2024 were about 100 000 barrels per day primarily to Latin America and Canada [17] - Diesel exports in Q3 2024 were 260 000 barrels per day primarily to South America and Europe [17] Company Strategy and Industry Competition - The company remains committed to enhancing earnings capability and expanding long-term competitive advantage [4] - Improving diesel demand and low light product inventories are expected to support refining margins [5] - OPEC plus crude supply increases are expected to widen sour crude oil differentials and increase margins [5] - The company expects product demand to exceed supply due to announced refinery shutdowns and limited capacity additions beyond 2025 [5] Management Commentary on Operating Environment and Future Outlook - The third quarter reflected a period of heavy maintenance in the refining segment during a relatively weak margin environment [4] - The company expects refining throughput volumes to fall within specific ranges across different regions in Q4 2024 [12] - Renewable diesel sales volumes are expected to be approximately 1 2 billion gallons in 2024 [13] - Ethanol production is expected to average 4 7 million gallons per day in Q4 2024 [13] Other Important Information - The company ended Q3 2024 with $8 4 billion of total debt $2 5 billion of finance lease obligations and $5 2 billion of cash and cash equivalents [11] - The debt-to-capitalization ratio net of cash and cash equivalents was 17% as of September 30 2024 [11] - The company expects capital investments attributable to Valero for 2024 to be approximately $2 billion [11] Q&A Session Summary Question: Demand for key products and trends [15] - Demand for gasoline is flat to slightly up while diesel demand has increased year-over-year [16] - Total light products in the U S are flat to slightly down year-over-year [17] - Export demand for gasoline and diesel remains strong particularly in Latin America and Europe [17] Question: Capital allocation and buyback program [23] - The company has a minimum commitment of 40% to 50% for shareholder returns and has consistently exceeded this despite margin pullbacks [24] - Excess free cash flow will continue to go towards buybacks [25] Question: California refinery operations and regulatory pressures [26] - California regulatory environment is increasing pressure on operators and all options are on the table for the company's West Coast operations [30] - The company has minimized strategic CapEx in California and maintains reliable operations as a core call option on West Coast cracks [30] Question: Global product supply and trade flows [32] - Net capacity additions of 300 000 barrels per day are expected in 2025 with tightening balances anticipated [33] - The company expects an extended period of tighter refining margins due to limited capacity additions and growing product demand [33] Question: Renewable diesel and SAF operations [34] - The SAF project startup is progressing well with strong commercial interest and contracting [35] - The company expects the SAF project to exceed its minimum return threshold of 25% after tax [36] Question: Refinery utilization and potential closures [38] - The company expects additional refinery closures globally particularly in Europe and the Far East [41] - Refinery utilization rates are expected to align with historic levels but some capacity may require significant capital investment [39] Question: California refinery cost competitiveness [42] - The West Coast operations are the company's highest cost structure due to regulatory environment and crude supply challenges [42] - The company positions its West Coast assets as a call option for when supply imbalances occur [42] Question: California regulatory impact and political interference [44] - California policies have historically increased costs for consumers and impaired supply [29] - The company is monitoring regulatory developments and will react accordingly [45] Question: Diesel demand trends [46] - Diesel demand has shown a 5% year-over-year increase in the last two weeks with tightening inventories heading into winter [46] Question: Ethanol production and export opportunities [70] - Ethanol production guidance for Q4 2024 is at an all-time record due to expanded export markets and increased global interest in ethanol [70] - The company has grown its ethanol capacity in anticipation of global demand increases [70] Question: Financial framework and balance sheet usage [73] - The company targets a cash balance of $4 billion to $5 billion in a normalized environment and expects to trend down from current levels [73] - The $4 billion cash balance provides flexibility to continue buybacks during downturns [74] Question: Product exports and market dynamics [75] - Gasoline inventories are low indicating a pull rather than a push for exports [75] - The company is able to sell to international markets at a higher price than the U S Gulf Coast [76]

Valero Energy Corporation (VLO) reported third-quarter 2024 adjusted earnings of $1.14 per share, which missed the Zacks Consensus Estimate of $1.29. The bottom line also declined from $7.49 reported in the yearago quarter. Total quarterly revenues decreased from $38,404 million in the prior-year quarter to $32,876 million. The top line also missed the Zacks Consensus Estimate of $33,041 million. The weak quarterly results can be primarily attributed to a significant decline in refining throughput volumes. ...