QualityDipStocks / Energy · Integrated oil
Valero Energy VLO
Not in a dip by our rules: 13% below its 52-week high.
A quality company trading well below our fair value estimate.
- Fair value est.
- $796.14+99%
- Market Value
- $401.25at the price
- Off 52-wk high
- −13%
- Risk vs market
- Lowbeta −0.42
5 bullish · 5 bearish See why
Key levels
Every level vs today’s $399.66
- 52-wk lowlowest close, 1 year$161.94−59.5%
- PriceFri Oct 30 close$399.66you are here
- Market Valueavg paid since Oct 22$401.25+0.4%
- 52-wk highhighest close, 1 year$459.78+15.0%
- Fair value est.base case$796.14+99.2%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 3.0% ±2 points. Bear = 10.5% and 1.0%; bull = 8.5% and 5.0% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is below even the bear case.
Cyclical / peak cash flow — treat with care
What the price implies To be worth today’s price, VLO’s free cash flow would need to shrink about 9% a year for five years; our estimate uses 3%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much VLO moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Has moved mostly independently of the market, but its own price swings are 3.0× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- -0.42
- Volatility
- 38% vs 13% SPY
- Correlation SPY
- −0.14
- Correlation QQQ
- −0.12
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationP/E of 8.8× is 35% below its own average of 13.7× at the last 3 fiscal year-ends.
ValuationOur DCF fair value estimate is $796.14, 99% above the price (cyclical or peak cash flow, so treat with care).
Cash returnsShare count down 7.8% in a year: $7.3B of buybacks over 12 months.
ValuationP/E of 8.8× vs a 16.2× median for the 43 Energy companies we cover.
ProfitabilityReturn on equity of 50% over the last 12 months.
Top bearish points 5 of 5
ProfitabilityReturn on equity fell 24 points in two fiscal years, to 10% in FY2025.
GrowthSales shrank 11% a year from FY2022 to FY2025.
ProfitabilityOperating margin narrowed to 2.6% in FY2025 from 8.2% in FY2023 (SEC filings).
ProfitabilityGross margin narrowed to 4.4% in FY2025 from 8.9% in FY2023 (SEC filings).
RiskCyclical business: one strong year of cash flow can make it look cheaper than it is.
Who’s talking about it
Notable investors, executives, analysts and public figures on Valero Energy in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Integrated oil
All fundamentals
P/E 8.8 · ROE 50% · Sales +25%
Valuation
- P/E
- 8.8×3-yr-end avg 13.7× · Energy median 16.2×
- Price / FCF
- n/anot reported in its SEC filings
- FCF yield
- n/anot reported in its SEC filings
- EV / EBITDA
- 5.5×
- Price / sales
- 0.74×
- Price / book
- 4.07×
- Market cap
- $114Bprice × diluted shares
- Enterprise value
- $114B
Growth
- Revenue, 12 months
- $153B
- Sales growth, 12 months
- +24.6%vs the 12 months before
- Sales growth, 3 yrs
- −11.4%/yrfrom FY2022
- Diluted EPS, 12 months
- $43.97
- EPS growth, last FY
- −11.8%
- Net income, 12 months
- $12.9B
- Net income growth
- n/an/m: earnings a year ago near zero
Profitability
- Gross margin
- 12.3%
- Operating margin
- 11.5%
- Net margin
- 8.4%
- FCF margin
- n/anot reported in its SEC filings
- Return on equity
- 50%
- Return on invested capital
- 48%
Balance sheet
- Cash & short-term inv.
- $9.8B
- Total debt
- $10.0B
- Net cash
- −$172M
- Debt / equity
- 0.36×
- Interest coverage
- 30.9×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- n/anot reported in its SEC filings
- FCF growth, 12 months
- n/anot reported in its SEC filings
- Dividend yield
- 1.23%$1.4B paid
- Payout ratio
- 11%
- Buybacks, 12 months
- $7.3B6.4% of market cap
- Share count, 1 year
- −7.8%diluted shares vs a year ago
- Stock-based comp
- n/anot reported in its SEC filings
Trailing 12 months to Sep 30, 2026; balance sheet at Sep 30, 2026. From Valero Energy’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $796.14 · MV $401.25 · FCF value $1,404
Cyclical / peak cash flow — treat with care
Assumes 3.0% growth for 5 years (revenue grew -11.4% a year FY22–FY25; floored at 3%), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $50.24 a share (trailing 12 months to Sep 30, 2026), from the 10-Q filed Oct 28, 2026. Capex: capital expenditures plus turnaround/catalyst spending, incl. consolidated VIEs.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only arm once a company is in a dip.
Momentum & 52-week range
RSI 45 · 5 days −4.7%
The business
FCF $15.1B · Sales +43%
- Free cash flow, 12 months$15.1B
- Free-cash-flow yield14.1%
- Free-cash-flow margin10%
- Gross margin12%
- Operating margin12%
- Return on invested capital36%
- Return on equity52%
- Sales growth (latest quarter vs year-ago quarter)+43%
- Net debt / EBITDA0.1×
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
Get a text when VLO fires a reversal signal
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