S&P CAPITAL IQ MAINTAINS STRONG BUY OPINION ON SHARES OF VALERO ENERGY
(S&P Capital IQ)
Reflecting a recent increase in peer valuation multiples, we lift our target price by $11 to $57, a multiple of 5.4X enterprise value to our '14 EBITDA forecast. We raise our '14 EPS estimate to $5.13 from $4.60, based on operational efficiencies and enhancements to run more domestic light sweet crude. We initiate our '15 EPS forecast at $5.71. We are positive about its strategic location on the Gulf Coast, which we think will allow VLO to benefit from higher crude oil production heading towards the region and facilitate its ability to transport refined products globally.