Valero Sees Fuel Margins Rebounding Despite White House Push to Cut Prices
VLO has more than doubled off its 52-week low of $156.26.
Summary
On the Q3 call, COO Gary Simmons said refining cracks should recover from their recent pullback, arguing the downward pressure is mostly headlines and that sanctions relief is a trade-flow shift rather than real new supply. The numbers behind that view were enormous: Q3 refining margin nearly tripled to $39.24 per barrel of throughput and refining operating earnings jumped to $8.8B from $1.6B a year earlier, on the way to the highest quarterly profit in company history. Management also said gasoline fundamentals and diesel export demand look very strong, and it plans to run U.S. refineries at 96%-99% of their 3M bbl/day capacity in Q4, deferring maintenance to capture prices. The catch is that shares fell about 3% Thursday even with the blowout beat, with Piper Sandler noting the market has come to expect double-digit beats. The forward margin call is the part that matters: it tells you management thinks the current crack spread softness is temporary, and the Q4 utilization plan is the concrete bet behind it.
At the time of this announcement, VLO was trading at $423.93 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $122.1B. The 52-week trading range was $156.26 to $461.52. This news item was assessed with positive market sentiment and an importance score of 7 out of 10. Source: Seeking Alpha.