Piper Sandler on Valero Energy (VLO): 'Valuation is More Attractive Than the Market Believes'

Piper Sandler analyst Ryan Todd reiterated an Overweight rating and $201.00 price target on Valero Energy (NYSE: VLO).

The analyst commented: "Expensive on What? Valuation is More Attractive Than the Market Believes; Over the last couple of months of investor conversations on refining, it is clear that while sentiment remains constructive, particularly on the 2026 outlook, the biggest concern is overwhelmingly valuation. And though consensus view is that the stocks are expensive, the question is: expensive on what? The primary answer is on multiples, which we acknowledge are stretched. However, we think this is the wrong way to look at the stocks. Historical multiples ignore the real ways in which VLO (and the industry) is different today: balance sheet, earnings resilience, sustainability of shareholder returns, and the evolution of supply/ demand drivers. More importantly, the investment case for oil and gas companies today is based on cash return to shareholders. And on FCF yield, we continue to view VLO as relatively attractive on an absolute basis, and vs. other premium large-cap names within energy (8.5%-10% FCF yield in 2026 vs. IOC/E&P peers at 5.5%-7%)."

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 $169.56 yesterday.

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