Streetview: Brokerages see strong setup for Valero on refining margins and Gulf Coast edge

By Reuters News

US refiner Valero Energy VLO.N on Thursday posted its highest-ever quarterly profit, beating Wall Street expectations, as fuel supply disruptions due to wars in Iran and Ukraine boosted margins during the third quarter


REFINING MARGIN STRENGTH AND GULF COAST ADVANTAGES

** JP Morgan ("overweight") raises PT to $447 from $439, says the quality of the beat was "not in question," with stronger-than-expected performance in refining and ethanol

** Brokerage raises its 4Q26 EPS forecast to $20.60 from $14.35, above Wall Street's expectation of $17.21, on stronger refining margin assumptions

** Raymond James ("Strong buy") raises PT to $530, says VLO remains well positioned to benefit from a strong long-term US refining backdrop and near-term support from global supply disruptions

** Elevated freight rates are creating a significant competitive advantage for Gulf Coast refiners, with Valero’s access to discounted heavy-sour crude providing potential margin and capture upside into Q4 and beyond, Raymond James says

** UBS ("Buy") says VLO could reach a net cash position by end-2026 despite record buybacks, with super-cycle refining margins driving excess cash generation and supporting additional shareholder returns

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