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Research Alert: CFRA Keeps Buy Opinion On Shares Of Valero Energy Corporation
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Research Alert: CFRA Keeps Buy Opinion On Shares Of Valero Energy Corporation
Jul 28, 2025 9:55 PM

12:40 AM EDT, 07/29/2025 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

Our 12-month target of $166, up $14, reflects our EV/EBITDA (80%) and DCF model (20%) analyses. A 6.5x multiple of EV to projected 2026 EBITDA, in line with VLO's historical forward average, yields a value of $159/share. Our DCF model, based on medium-term free cash flow growth of 5%, terminal growth of 2%, and a WACC of 7.2%, yields a value of $200/share. We lift our 2025 EPS estimate by $1.12 to $8.18, and our 2026 estimate by $0.09 to $11.31. We see refining margins widening in 2025 and 2026, in the high single digits in both years. VLO should benefit from a robust export market. In the U.S., we see flattish demand growth as modest economic growth is offset by vehicle fuel efficiency gains. We also think the pending elimination of the federal tax credit on new electric vehicles (sunset date is September 30, 2025) is likely to discourage more switching to EVs in the near term, given that EVs are (for now) more expensive to begin with than their internal combustion engine counterparts.

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