Valero Energy Corporation (VLO) Stock Analysis
Score A+Compounder · Grade A · Bullish
$262.07
$328.09
+25.2%
10/10
A
Compounder
Investment Thesis
High quantitative score: Solid company with strong risk/reward at 6.6:1.
For New Investors
Quantitative score: high
For Current Holders
Quantitative score: neutral
Buy if
- Price drops 15-20% (improves asymmetry)
- Bull scenario catalysts materialize
- Market-wide correction creates opportunity
Sell if
- Bear scenario triggers occur
- Quality metrics deteriorate (ROIC declining)
- Better alternatives emerge
Valuation
Fair Value estimate: $328.09 (+25.2%). Significantly undervalued.
PEG-Based EPS
$340.69
FCF DCF Model
$340.69
EV/EBITDA
$340.69
Blended Fair Value
$328.09
Confidence
High
Methods
PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
90/120 points
Investable
ROE (3Y Avg)
18.2%
ROIC-WACC Spread
2.6%
D/E Ratio
0.5x
Current Ratio
1.6x
Interest Coverage
8x
FCF Positive Years
3/3
Quality Flags
- ROIC spread: 2.7pp (got 7/25 pts)
- Leverage: D/E 0.5x (13/15 pts)
Market Sentiment
Wall Street Consensus
$209.00
-20.3% Upside
19 analysts
Range: $178.00 — $263.00
Rating: Buy
Our model is slightly more bullish than Wall Street.
Trend & Technical
Price ($261.92) is 39.1% above SMA 200 ($188.36). Bullish trend confirmed.
Tech Score 85/100 — MOMENTUM ALIGNMENT. Healthy uptrend confirmed by RSI and MACD. Technical tailwind.
Risk & Reward
Asymmetry Ratio
6.59:1
Expected Return
+31.4%
Bull Upside
+65.9%
Bear Downside
-10.0%
Excellent asymmetry: 6.59:1 ratio. Upside significantly outweighs downside.
Verdict: Very Favorable
Scenario Analysis
Bear
Base
Bull
Buy Zone & Action Plan
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AI Executive Summary
Get a detailed AI-written breakdown of the investment thesis, risks, and catalysts.
Technical Analysis
RSI, MACD, moving averages, trend signals, and momentum indicators.
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Frequently Asked Questions
What is the fair value of VLO?
Based on our multi-method conviction analysis, the estimated fair value of Valero Energy Corporation (VLO) is $328.09. This is calculated by blending PEG-Based EPS, FCF 2-Stage DCF, EV/EBITDA and applying a quality premium of 0% based on the company's fundamentals. The confidence level of this estimate is high.
Is VLO a buy, sell, or hold?
VLO currently has a STRONG_BUY rating with a conviction score of 10/10. High quantitative score: Solid company with strong risk/reward at 6.6:1. Quantitative score: high.
Is VLO a high-quality stock?
Valero Energy Corporation has a quality grade of A (90/120 points), rated as Investable. Key metrics include ROE of 18.2%, ROIC-WACC spread of 2.6%, and D/E ratio of 0.5x.
What type of stock is VLO?
VLO is classified as a "compounder" in our framework. Low dividend (reinvesting): 1.8%, Mature growth: -3.8%, High revenue volatility: 33.4% std dev, Cyclical sector: Energy, Dividend paying: 1.8%
What do Wall Street analysts say about VLO?
19 Wall Street analysts have a consensus price target of $209.00 for VLO, representing -20.3% upside. Targets range from $178.00 to $263.00. The consensus recommendation is "Buy". Our model is slightly more bullish than Wall Street.
What are the risks of investing in VLO?
The risk/reward asymmetry ratio for VLO is 6.59:1, rated as Very Favorable. Excellent asymmetry: 6.59:1 ratio. Upside significantly outweighs downside. The expected return is +31.4%, with bull case upside of +65.9% and bear case downside of -10.0%.
What is the current trend for VLO?
VLO is in a bullish trend. Price ($261.92) is 39.1% above SMA 200 ($188.36). Bullish trend confirmed. The technical score is 85/100.
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Last updated: May 19, 2026 · Framework version 3.7
This analysis is for informational purposes only and should not be considered financial advice. Always do your own research before making investment decisions.