Valero (VLO) Prospects Improve on New Projects, Lower CAPEX - Oppenheimer

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Oppenheimer lifted its price target on Outperform-rated Valero Energy (NYSE: VLO) from $35 to $40 to reflect continued strong industry fundamentals, benefits from new projects, and the impact of lower CAPEX on earnings, cash flow and valuation.

"VLO last month started up one of two new hydrocrackers and expects to start up the second in 2Q13, which will boost earnings and cash flow," the analyst notes. "The completion of these projects, which cost $3 billion over the last three years, will reduce future CAPEX by $1 billion from the 2012 level of $3.5 billion. We expect VLO to generate over $4 billion in free cash flow in the 2012-2014 period, which will likely be used to buy back stock and grow the dividend."

For an analyst ratings summary and ratings history on Valero Energy click here. For more ratings news on Valero Energy click here.

Shares of Valero Energy closed at $34.72 yesterday, with a 52 week range of $19.12-$35.57.

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