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Valero Energy Corp VLO

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Energy Stocks Surge on Positive Vaccine News, but Plenty of Upside Remains

Preston Caldwell Equity Analyst

Analyst Note

| Preston Caldwell |

Energy stocks surged on Nov. 9 following Pfizer's announcement of favorable phase 3 data on its COVID-19 vaccine. The broader U.S. Market Index was up 1% on the day, but the energy sector led the way up 14%. Oil prices (West Texas Intermediate) were also up about 8%. Despite the rally, the energy sector is still down around 45% year-to-date. We think the sell-off has been overdone, and as such energy stocks continue to look undervalued overall. Our median covered energy stock trades at a 37% discount to our fair value. Within energy, oilfield services look cheapest overall, trading at a median 52% discount to fair value. E&Ps are also at a 45% median discount to fair value.

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Company Profile

Business Description

Valero Energy is one of the largest independent refiners in the United States. It operates 14 refineries with a total throughput capacity of 3.1 million barrels a day in the United States, Canada, and the United Kingdom. Valero also owns 14 ethanol plants with capacity of 1.7 billion gallons of ethanol a year and holds a 50% stake in Diamond Green Diesel, which has capacity to produce 275 million gallons per year of renewable diesel.

Contact
One Valero Way
San Antonio, TX, 78249
T +1 210 345-2000
Sector Energy
Industry Oil & Gas Refining & Marketing
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Hard Assets
Employees 10,222

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