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Deutsche Bank Downgrades Valero Energy (VLO) to Hold

January 4, 2017 6:39 AM EST
Get Alerts VLO Hot Sheet
Price: $170.69 +1.72%

Rating Summary:
    21 Buy, 8 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Deutsche Bank downgraded Valero Energy (NYSE: VLO) from Buy to Hold with a price target of $65. Analyst Ryan Todd sees balanced risk/reward.

"While VLO remains a fundamentally strong operator with sustainably strong capture rates and gulf coast optionality to take advantage of crude congestion, we see the market as reflecting a full valuation for shares of VLO at current levels, currently trading at 7.1x forward EBITDA, a 2.5x premium to its historical (2010- 2016 YTD averages). This would more than fully price in a full repeal of RINs expenses and corporate tax reform, two major tailwinds for the refinery sector in 2017. Further, with OPEC heavy/sour production cuts a potential risk to Gulf Coast heavy/sour diffs, limited exposure to potentially widening Midland diffs, and potential risks (or at least noise) from Border Transfer Adjustments, and we view the risk-reward as largely balanced from here," said the analyst.

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 $70.42 yesterday.



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