VLO Should I Buy
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Valero Energy Corp (VLO) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown strong financial performance in the latest quarter and has positive long-term prospects, current technical indicators and options sentiment suggest a neutral to slightly bearish short-term outlook. Additionally, no significant trading signals or catalysts make this an urgent buy right now.
The stock is trading with bullish moving averages (SMA_5 > SMA_20 > SMA_200), and the MACD histogram is positive at 0.641, indicating a bullish trend. However, the RSI of 57.006 is neutral, and the stock is trading near a resistance level of 204.889, which could limit further upside in the short term.
Strong Q4 financial performance with a 305% YoY increase in net income and a 320.22% YoY increase in EPS.
Positive analyst updates, with multiple firms raising price targets, including UBS ($
and Piper Sandler ($220).
The U.S. refining sector is recovering, driven by tighter global fuel supplies and increased seasonal demand.
Options sentiment is bearish with high Put-Call ratios.
Stock trend analysis indicates a 50% chance of a -7.69% decline in the next month.
Revenue dropped by -6.91% YoY in Q4 2025, which could be a concern for long-term growth.
Analysts like Morgan Stanley remain cautious due to valuation concerns and potential headwinds from crude differentials.
In Q4 2025, Valero's revenue dropped by -6.91% YoY to $28.63 billion. However, net income surged by 305% YoY to $1.134 billion, and EPS increased by 320.22% YoY to $3.74. Gross margin also improved significantly, up 228.86% YoY to 6.61%. This indicates strong profitability despite a decline in revenue.
Analysts are mixed on Valero. While UBS and Piper Sandler maintain Buy and Overweight ratings with price targets of $215 and $220 respectively, others like Morgan Stanley and Citi remain Neutral or Equal Weight due to valuation concerns. The average price target is around $200-$215, suggesting limited upside from the current price of $200.16.
