Update shared on21 Sep 2025
Fair value Increased 4.88%Valero Energy’s consensus price target has been raised to $166.06 as analysts cite persistent refining margin strength, resilient product markets, and strong recent earnings, despite some valuation concerns following recent outperformance.
Analyst Commentary
- Bullish analysts highlight persistent global refining margin strength, with product markets remaining tight and defying expectations of a decline.
- Ongoing distillate tightness into the winter and a structurally favorable 2026 supply/demand outlook serve as tailwinds, supporting higher margin risks.
- Recent quarterly earnings, particularly Q2, have broadly surprised to the upside due to strong margin capture and robust early Q3 results.
- Valero is seen as a beneficiary of the refining sector's structural upcycle and is favorably positioned in key renewable energy themes.
- Bearish analysts cite valuation concerns following recent outperformance, limited underlying earnings growth, and increased bullishness already priced into the stock as reasons for shifting to Hold or Peer Perform ratings.
What's in the News
- California officials are actively seeking a buyer for Valero's Benicia refinery to avoid its planned April 2026 closure, in an effort to maintain local fuel supplies and limit gasoline price increases—an unusual move highlighting tensions between the state's green policies and fuel supply needs (Reuters, Key Developments).
- The California Energy Commission is engaging with potential buyers for the Benicia facility, including previously interested parties like HF Sinclair and European operators, after earlier sale talks fell through due to environmental concerns (Key Developments).
- The shutdown of Benicia and other major refineries, such as Phillips 66's Los Angeles-area plant, could remove around 17% of California’s gasoline supply, further increasing reliance on costly fuel imports and potentially pushing average state gas prices to $6–8 per gallon (Key Developments).
- Valero recently completed a share repurchase tranche of 2.57 million shares for $337.8 million between April and June 2025, finalizing a total buyback of 25 million shares ($3.65 billion) under a program launched in September 2023 (Key Developments).
- The company has been removed from several Russell Top 200 indices and added to the Russell Midcap and Midcap Value indices as of late June 2025, reflecting changes in its market capitalization and index eligibility (Key Developments).
Valuation Changes
Summary of Valuation Changes for Valero Energy
- The Consensus Analyst Price Target has risen slightly from $158.33 to $166.06.
- The Consensus Revenue Growth forecasts for Valero Energy has significantly risen from -0.2% per annum to 0.7% per annum.
- The Future P/E for Valero Energy has risen from 14.84x to 15.89x.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.