$VLO

Refiner Capital Returns Slip in Q1 as Crude Rally Pressures Free Cash Flow, TPH Says

US refiners delivered a softer but still solid quarter for shareholder returns in Q1, as rising crude prices and higher equity valuations pressured free cash flow and reduced buyback activity, TPH Energy strategists said in a note Friday.The average total capital return yield across refiners eased to 4.9% in Q1 from 6.3% in the prior quarter and 9.4% a year ago, the bank said. Matthew Blair, analyst at TPH, said the decline was driven largely by lower share repurchases and slightly reduced dividend yields.Share buybacks averaged a 2.8% yield, down from 4% in Q4 and 6.2% a year earlier, as higher crude prices and seasonal factors weighed on free cash flow. TPH said that half of the refiners in its coverage universe generated negative free cash flow in the quarter.Dividend yields also slipped to 2.1% from 2.3% in Q4 and 3.2% a year ago, despite dividend increases from Phillips 66 (PSX) and Valero Energy (VLO), reflecting higher average share prices during the period.Blair said among individual names, the strongest total capital return yields in Q1 were led by Par Pacific (PARR) at 9.2%, followed by Marathon Petroleum (MPC) at 7%, HF Sinclair (DINO) at 6.8%, and Valero Energy (VLO) at 6.1%. CVR Energy (CVI) was the only refiner that did not return capital during the quarter.Going ahead, TPH expects average total capital return yields to ease further to about 4.5% in Q2, despite what it described as robust profitability and free cash flow generation.The bank identified three main headwinds, including higher share prices, reduced opportunistic buybacks at Par Pacific, and a shift among some refiners, such as Phillips 66 and PBF Energy (PBF), toward debt reduction rather than share repurchases.TPH projects that Valero will lead total capital return yields in Q2 at an estimated 8.1%, followed by HF Sinclair at 7.5% and Marathon Petroleum at 6.7%.CVR Energy is expected to lag its peer group, with a projected yield of 1.1%, even as the energy firm moves to reinstate its dividend.Price: $176.42, Change: $+2.37, Percent Change: +1.36%

BMO Capital Adjusts Price Target on Valero Energy to $290 From $270, Maintains Outperform Rating

Valero Energy (VLO) has an average rating of overweight and mean price target of $259.33, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

Valero Energy Keeps Quarterly Dividend at $1.20 a Share, Payable on June 23 to Shareholders of Record on May 21

Research Alert: CFRA Keeps Buy Opinion On Shares Of Valero Corporation

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We raise our 12-month target price by $59 to $289, reflecting a combination of relative valuation and DCF model analyses. On a relative basis, we apply an 8.2x multiple of enterprise value to projected 2027 EBITDA, above peers. We argue for a premium valuation on the basis if superior return on invested capital (about 17% above that of independent refining peers). On this basis, we get a value of $275 per share. Meanwhile, our DCF model, using free cash flow growth of 4.2% per year for 10 years, 2.5% thereafter, yields a value of $303 per share. We raise our 2026 EPS estimate by $14.86 to $27.85 and 2027's by $6.42 to $19.65. Refining margins are likely to surge higher in Q2 as constrained volumes in the Persian Gulf help widen the gap between Brent and WTI crude (normally $4/b, that gap currently sits at $8/b), and we see possibility of this situation persisting in future quarters as well. VLO maximized its jet fuel production in March, which makes sense to us given market scarcity.

TD Cowen Adjusts Price Target on Valero Energy to $276 From $255, Maintains Hold Rating

Valero Energy (VLO) has an average rating of overweight and mean price target of $262.53, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)Price: $247.32, Change: $+0.49, Percent Change: +0.20%

Valero Refinery Recovery Gains Pace Post-Blast; Key Units Resume, Wood Mackenzie Says

Valero Energy's (VLO) 415,000 b/d Port Arthur refinery is gradually restoring operations more than a month after a Mar. 23 explosion disrupted output, Wood Mackenzie said Thursday.The blast damaged the diesel hydrotreater DHT-243, forcing a plant-wide shutdown and triggering phased recovery efforts as operators began restarting select processing units.Wood Mackenzie tracked progress using aerial surveillance and infrared monitoring, which showed reconstruction underway alongside sequential unit restarts across the facility, it said.The refinery restarted its fluid catalytic cracker on Apr. 26 and began ramping up its largest crude unit the same day, though utilization remains below normal levels, Wood Mackenzie added.Operators have ramped up major units, including a 265,000 b/d crude distillation unit and a 172,000 b/d vacuum distillation unit, which are currently increasing throughput, though not yet at full capacity.Several units have restarted, including a 150,000 b/d CDU and a 48,000 b/d VDU on April 2; hydrocrackers of 57,000 b/d and 45,000 b/d on April 3 and April 15; and an 80,000 b/d FCC on April 26, while a 47,000 b/d diesel hydrotreater and a sulfur recovery unit remain offline.The explosion also disrupted the adjacent Diamond Green renewable diesel plant, which depends on refinery utilities, though it resumed operations later in March, Wood Mackenzie added.Initial damage assessments showed the diesel hydrotreater sustained the most severe impact, with collapsed structures and extensive piping deformation across the unit.Nearby units experienced lighter damage, while two cooling towers and a control room within the blast zone suffered more significant structural impacts, Wood Mackenzie said.Repair crews have focused on rebuilding the cooling towers, with cranes, scaffolding, and dismantling work visible as contractors replaced damaged components.Despite progress, multiple units remained offline as of Apr. 27, including parts of the refinery's largest crude distillation system, limiting output recovery, according to Wood Mackenzie.The prolonged outage has tightened regional fuel markets, as the loss of 415,000 b/d capacity coincides with geopolitical tensions affecting global supply balances, Wood Mackenzie added.Wood Mackenzie said its combined aerial and field monitoring will continue tracking restart timelines and operational recovery across the refinery.

Morgan Stanley Adjusts Price Target on Valero Energy to $232 From $222

Valero Energy (VLO) has an average rating of overweight and mean price target of $259.94, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)Price: $245.42, Change: $-7.16, Percent Change: -2.83%

JPMorgan Adjusts Valero Energy Price Target to $299 From $285

Valero Energy (VLO) has an average rating of overweight and mean price target of $259.94, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

Goldman Sachs Adjusts Valero Energy Price Target to $283 From $258

Valero Energy (VLO) has an average rating of overweight and mean price target of $259.94, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

Raymond James Adjusts Valero Energy Price Target to $300 From $290

Valero Energy (VLO) has an average rating of overweight and mean price target of $259.94, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

Citigroup Adjusts Price Target on Valero Energy to $259 From $246

Valero Energy (VLO) has an average rating of overweight and mean price target of $254.76, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)Price: $251.19, Change: $-0.12, Percent Change: -0.05%

Research Alert: Vlo: Another Quarter, Another Eps Blowout

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:VLO easily surpassed Q1 expectations with adjusted EPS of $4.22 versus $0.89 in the prior year, beating consensus by $1.06 for the second consecutive quarterly blowout. The Refining segment drove performance, generating $1.8B in adjusted operating income versus $605M in the prior year, with margins widening to $14.90/b vs. $9.78, reflecting improved market fundamentals and solid 2.9M barrel per day throughput enabling strong fixed cost absorption. Both renewable segments showed marked improvement, with Renewable Diesel swinging to $139M operating income from a $141M loss and Ethanol contributing $90M versus $20M in the prior year. VLO remains on track for Q3 completion of its $230M FCC optimization project at St. Charles, which is expected to enhance refining margins via increased high-value product yields. We note California remains challenging, with the West Coast region posting an operating loss, but after the Benicia plant closure, California now represents less than 5% of VLO's refining capacity.

Valero Energy Q1 Refining Throughput Up

US petroleum refiner Valero Energy (VLO) Thursday reported higher refining throughput volumes across most operating regions in Q1.For the quarter ended March 31, refining throughput volumes averaged 2.9 million barrels per day, higher than the 2.8 mmbbls/d in the same quarter of 2025.Throughput at refineries on the US Gulf Coast, Mid-Continent, and North Atlantic inched up, while throughput at the US West Coast refineries dropped.Consequently, refining yields increased to 2.9 mmbbls/d from 2.8 mmbbls/d, with gasoline and blending components rising to 1.40 mmbbls/d from 1.38 mmbbld/d, and distillates growing to 1.11 mmbbls/d from 1.08 mmbbls/d.Ethanol production also climbed to 4.6 million gallons per day year over year from 4.5 mmgal/d, according to the report.The company said it sold 3 mmgal/d of renewable diesel during the period, up from the prior year's 2.4 mmgal/d.Going forward, Valero expects the fluid catalytic cracker at the St. Charles Refinery to begin operations in Q3, following unit optimization totaling $230 million.Price: $247.16, Change: $-4.14, Percent Change: -1.65%

Valero Energy's Q1 Adjusted Earnings, Revenue Increase

Valero Energy (VLO) reported Q1 adjusted earnings Thursday of $4.22 per diluted share, up from $0.89 a year earlier.Analysts polled by FactSet expected $3.16.Revenue for the quarter ended March 31 was $32.38 billion, compared with $30.26 billion a year earlier.Analysts polled by FactSet expected $31.38 billion.

Morgan Stanley Adjusts Price Target on Valero Energy to $222 From $182, Maintains Equalweight Rating

Valero Energy (VLO) has an average rating of overweight and mean price target of $254.53, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)Price: $240.41, Change: $+2.16, Percent Change: +0.91%

TD Cowen Adjusts Price Target on Valero Energy to $255 From $247, Maintains Hold Rating

Valero Energy (VLO) has an average rating of overweight and mean price target of $254.53, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

Refining Margins Unlikely to Return to Pre-Conflict Levels Anytime Soon, Morgan Stanley Says

Refining margins are unlikely to return to pre-conflict levels anytime soon, even if the Strait of Hormuz reopens, due to refinery damage, the time required to normalize trade flows, and the need to rebuild inventories, Morgan Stanley analysts said in a Friday note to clients.Analysts said first-quarter financial results for refining companies will be pressured by lower capture rates amid still-tight crude differentials, planned and unplanned maintenance, and derivative headwinds, partially offset by stronger secondary products.Morgan Stanley said near-term U.S. refining margins have roughly doubled since the start of the Iran conflict and now sit near levels last reached in 2022 and 2023.On Phillips 66 (PSX), analysts upgraded the stock to overweight from equal-weight.They said the chemicals business is a key factor that sets the company apart from the rest of the sector, with earnings from the segment expected to rise to about $1.1 billion from $352 million. They also raised the price target to $174 from $147.Morgan Stanley retained an overweight rating on Marathon Petroleum (MPC) and raised its price target to $233 from $200. It also maintained an overweight rating on HF Sinclair (DINO) and increased its price target to $66 from $57.On Valero Energy (VLO), Morgan Stanley maintained an equal-weight rating and raised the price target to $222 from $182. It also maintained an equal-weight rating on Delek US Holdings (DK) and raised its price target to $40 from $38.On PBF Energy (PBF), Morgan Stanley maintained an underweight rating and raised the price target to $34 from $27.Price: $224.00, Change: $+2.90, Percent Change: +1.31%

Morgan Stanley Raises Price Target on Valero Energy to $222 From $182, Keeps Equalweight Rating

Valero Energy (VLO) has an average rating of overweight and mean price target of $254.06, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

Scotiabank Adjusts Price Target on Valero Energy to $226 From $178, Maintains Sector Outperform Rating

Valero Energy (VLO) has an average rating of overweight and mean price target of $251.71, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)Price: $234.26, Change: $+0.87, Percent Change: +0.37%

Market Chatter: Valero Energy Partially Resumes Operations At Port Arthur Refinery

Valero Energy (VLO) has reportedly restarted its 380,000 barrels per day Port Arthur, Texas refinery, following an explosion and fire last month, which led to the unit being shut down, Reuters reported, citing two unnamed sources.According to reports, the 115,000 bpd AVU 147 crude distillation unit is back online, while the 210,000 bpd unit is still shut as its heater is still undergoing repairs.The AVU 146 unit accounts for roughly 2% of crude refining capacity across the U.S. Gulf Coast and about 3.4% of Texas's total, underscoring its importance to the region's energy security.Reuters noted that diesel prices rose by 16 cents per barrel on the day of the explosion, following news of its closure.Valero did not immediately respond to' request for a comment on this story.(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)