Barclays Maintains an 'Equalweight' on Valero Energy (VLO); 2Q11 Outlook Strong but Margin Trend May Begin to Deteriorate
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Price: $341.67 -0.36%
Rating Summary:
16 Buy, 15 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
16 Buy, 15 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Barclays maintains an 'Equalweight' on Valero Energy (NYSE: VLO), PT $30.
Barclays analyst says, "Depending on the location and configuration of the refineries, there are three major drivers currently behind the U.S. refiners' profit margins -- product crack, light/heavy differential, and WTI/Brent spread. We think two of these three factors, light/heavy differential and WTI/Brent spread, may deteriorate from their current levels in the coming months while the product crack remains relatively sluggish. We reiterate our Negative sector rating."
"At $459 per daily barrel of complexity, VLO is now trading at 29% of the current U.S. greenfield replacement cost. In comparison, we estimate VLO traded at an average 27% in 1999 (cycle trough) and 33% in 2001 (cycle high)...We modestly raise our 2011 and 2012 EPS estimates for VLO to $2.65/sh and $3.20/sh from $2.60/sh and $3.15/sh, respectively."
For more ratings news on Valero Energy click here and for the rating history of Valero Energy click here.
Shares of Valero Energy closed at $28.02 yesterday.
Barclays analyst says, "Depending on the location and configuration of the refineries, there are three major drivers currently behind the U.S. refiners' profit margins -- product crack, light/heavy differential, and WTI/Brent spread. We think two of these three factors, light/heavy differential and WTI/Brent spread, may deteriorate from their current levels in the coming months while the product crack remains relatively sluggish. We reiterate our Negative sector rating."
"At $459 per daily barrel of complexity, VLO is now trading at 29% of the current U.S. greenfield replacement cost. In comparison, we estimate VLO traded at an average 27% in 1999 (cycle trough) and 33% in 2001 (cycle high)...We modestly raise our 2011 and 2012 EPS estimates for VLO to $2.65/sh and $3.20/sh from $2.60/sh and $3.15/sh, respectively."
For more ratings news on Valero Energy click here and for the rating history of Valero Energy click here.
Shares of Valero Energy closed at $28.02 yesterday.
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