Fundamental & Technical analysis of Valero!
Valuation: VLO is currently trading at a price-to-earnings (P/E) ratio of 4.3x, which is below the industry average of 15.9x. This suggests that the stock is undervalued. VLO's price-to-book (P/B) ratio is also 1.1x, which is below the industry average of 1.4x. This suggests that the stock is also undervalued on a book value basis.
Profitability: VLO has a strong track record of profitability. In the most recent quarter, the company reported earnings per share of $8.45, which was up 54.7% year-over-year. VLO's return on equity (ROE) is 25.1%, which is above the industry average of 11.5%.
Growth: VLO is expected to grow its earnings per share by an average of 10.5% per year over the next three years. This growth is driven by the company's plans to expand its renewable fuels business and its focus on efficiency improvements.
Dividend: VLO is a dividend-paying stock. The company currently pays a quarterly dividend of $0.90 per share, which gives it a dividend yield of 3.05%.
Risks: The main risks to VLO include:
Changes in oil prices: VLO is a refiner, so its profits are sensitive to changes in oil prices. If oil prices fall, VLO's profits will also fall.
Increased competition: The oil refining industry is competitive, and VLO faces competition from other refiners, both domestic and international.
Regulatory changes: VLO is subject to a variety of regulations, and changes in these regulations could impact the company's business.
Overall, VLO is a well-run company with strong fundamentals. The stock is undervalued, and it offers a good dividend yield. However, investors should be aware of the risks associated with the oil refining industry.
Technical indicators: The daily chart for VLO shows that the stock is trading above its 200-day moving average, which is a bullish signal. The stock is also forming a bullish pattern called a cup and handle. This pattern is often followed by a breakout to the upside.
Price forecast: Based on the technical analysis, I believe that VLO has the potential to reach a price target of $150.
Profitability: VLO has a strong track record of profitability. In the most recent quarter, the company reported earnings per share of $8.45, which was up 54.7% year-over-year. VLO's return on equity (ROE) is 25.1%, which is above the industry average of 11.5%.
Growth: VLO is expected to grow its earnings per share by an average of 10.5% per year over the next three years. This growth is driven by the company's plans to expand its renewable fuels business and its focus on efficiency improvements.
Dividend: VLO is a dividend-paying stock. The company currently pays a quarterly dividend of $0.90 per share, which gives it a dividend yield of 3.05%.
Risks: The main risks to VLO include:
Changes in oil prices: VLO is a refiner, so its profits are sensitive to changes in oil prices. If oil prices fall, VLO's profits will also fall.
Increased competition: The oil refining industry is competitive, and VLO faces competition from other refiners, both domestic and international.
Regulatory changes: VLO is subject to a variety of regulations, and changes in these regulations could impact the company's business.
Overall, VLO is a well-run company with strong fundamentals. The stock is undervalued, and it offers a good dividend yield. However, investors should be aware of the risks associated with the oil refining industry.
Technical indicators: The daily chart for VLO shows that the stock is trading above its 200-day moving average, which is a bullish signal. The stock is also forming a bullish pattern called a cup and handle. This pattern is often followed by a breakout to the upside.
Price forecast: Based on the technical analysis, I believe that VLO has the potential to reach a price target of $150.
Comment:
+7% in the past 3 days since the analysis was published!
