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Valero Energy (VLO) Gains But Lags Market: What You Should Know

Zacks Equity Research
Citizens Financial Group (CFG) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Valero Energy (VLO) closed at $85.02 in the latest trading session, marking a +0.09% move from the prior day. This move lagged the S&P 500's daily gain of 0.5%. Meanwhile, the Dow gained 0.54%, and the Nasdaq, a tech-heavy index, added 0.76%.

Heading into today, shares of the oil refiner had gained 1.59% over the past month, lagging the Oils-Energy sector's gain of 2.26% and the S&P 500's gain of 2.53% in that time.

Wall Street will be looking for positivity from VLO as it approaches its next earnings report date. This is expected to be April 25, 2019. The company is expected to report EPS of $0.66, down 34% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $15.47 billion, down 41.51% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.34 per share and revenue of $108.33 billion. These totals would mark changes of -0.41% and -7.44%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for VLO. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.41% lower. VLO currently has a Zacks Rank of #3 (Hold).

Digging into valuation, VLO currently has a Forward P/E ratio of 11.57. This represents a discount compared to its industry's average Forward P/E of 11.65.

Meanwhile, VLO's PEG ratio is currently 1.45. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Oil and Gas - Refining and Marketing was holding an average PEG ratio of 1.21 at yesterday's closing price.

The Oil and Gas - Refining and Marketing industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 153, putting it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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