Key Stats for Valero Energy Stock
- This-Week Performance: 12%
- 52-Week Range: $99 to $204
- Valuation Model Target Price: $240
- Implied Upside: 19%
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What Happened?
Valero Energy Corporation stock rose about 12% this week, finishing near $201 per share, as refining stocks rebounded on improving margin sentiment and a steady stream of analyst updates. Shares pushed to a new 52-week high, trading as high as $198 during the week, reflecting renewed confidence in near-term cash flow and capital returns.
The stock moved higher as analyst actions and upgrades reinforced confidence in Valero’s earnings durability at a time when refining margins appear to be stabilizing.
Citigroup raised its price target to $212 from $190, maintaining a Neutral rating, while another research firm upgraded the stock from Hold to Buy, helping sustain momentum as shares moved to cycle highs.
This week, Valero also reported strong fourth-quarter 2025 results, posting net income of $1.1 billion, or $3.73 per share, driven by favorable refining margins and record operating performance.
The Refining segment delivered $1.7 billion in operating income, supported by record throughput of 3.1 million barrels per day at 98% utilization, and CEO Lane Riggs said that “we believe refining fundamentals should remain supported by continued demand growth and tight supply.”
Institutional activity was mixed but did not derail the rally. AGF Management cut its stake by 55.6%, while Mediolanum International Funds reduced its position by 72.1%, even as institutional investors continue to hold a large majority of Valero’s shares.
Despite selective trimming, Valero’s ability to hit new highs alongside earnings follow-through and analyst revisions reinforced confidence in the stock’s near-term setup.
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Is Valero Energy Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 1.8%
- Operating Margins: 4.4%
- Exit P/E Multiple: 12x
Revenue expectations reflect a refining business moving through a normalized environment, where results are driven less by volume growth and more by margin discipline, utilization rates, and access to advantaged crude.
After peaking in 2022, revenue has stepped down and stabilized, reinforcing the view that future returns depend more on efficiency and mix than top-line expansion.
Analyst assumptions and the valuation model point to earnings power that leans heavily on crack spreads and heavy sour crude discounts, particularly across Valero’s Gulf Coast system.
Access to Canadian and Venezuelan crude, combined with export optionality, positions the company to sustain margins even in mid-cycle conditions.
Based on these inputs, the TIKR Guided Valuation Model estimates a target price of $239.63, implying roughly 19% total upside over about 2.9 years, or around 6.2% per year, which suggests the stock appears modestly undervalued at recent prices.
Over the next 12 months, margin resilience, renewable diesel execution, and shorter-cycle optimization investments that enhance crude and product optionality remain the key business drivers.
At current levels, Valero appears modestly undervalued, with future performance driven by margin durability, feedstock advantages, and disciplined capital allocation rather than a rebound in headline revenue growth.
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