Is the Current Oil Price Beneficial for Par Pacific's Refining Operations?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 03 2025
0mins
Source: NASDAQ.COM
Current Oil Prices and Market Impact: West Texas Intermediate (WTI) oil prices are below $60 per barrel, creating uncertainty in the energy sector, but refining companies like Par Pacific Holdings, Phillips 66, and Valero Energy are positioned to benefit from lower crude costs.
Par Pacific Holdings' Advantage: Par Pacific, with a refining capacity of 219,000 barrels per day, can purchase oil at lower prices, enhancing its profitability as crude prices are expected to remain soft, with projections indicating a decline in future prices.
Performance and Valuation: Par Pacific's shares have surged 184% over the past year, outperforming the industry average, and it currently holds a strong buy rating with a trailing EV/EBITDA of 5.47X, above the industry average of 4.56X.
Earnings Outlook: The Zacks Consensus Estimate for Par Pacific's 2025 earnings has been revised upward recently, indicating positive market sentiment and potential for continued growth in the refining sector.
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Analyst Views on VLO
Wall Street analysts forecast VLO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for VLO is 186.56 USD with a low forecast of 149.00 USD and a high forecast of 223.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
17 Analyst Rating
11 Buy
6 Hold
0 Sell
Moderate Buy
Current: 182.490
Low
149.00
Averages
186.56
High
223.00
Current: 182.490
Low
149.00
Averages
186.56
High
223.00
About VLO
Valero Energy Corporation, through its subsidiaries, is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products. The Company sells its products primarily in the United States, Canada, the United Kingdom, Ireland and Latin America. Its segments include Refining, Renewable Diesel, and Ethanol. The Refining segment includes the operations of its petroleum refineries, the associated activities to market its refined petroleum products, and the logistics assets that support its refining operations. The Renewable Diesel segment represents the operations of Diamond Green Diesel (DGD), and the associated activities to market renewable diesel, renewable naphtha, and neat SAF. The Ethanol segment includes the operations of its ethanol plants and the associated activities to market its ethanol and co-products. It owns 15 petroleum refineries located in the United States, Canada and the United Kingdom.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Valero Energy Corporation Q4 Results Exceed Expectations
- Earnings Beat: Valero Energy Corporation's Q4 2025 results surpassed Wall Street expectations with an adjusted EPS of $3.82, exceeding forecasts by $0.55, indicating a robust rebound in refining margins and throughput.
- Refining Margin Surge: The company's refining margin per barrel increased by over 61% year-over-year to $13.61, while average throughput rose to 3.1 million barrels per day from nearly 3 million bpd last year, reflecting strong market demand recovery.
- Cash Flow and Shareholder Returns: Valero reported $6 billion in adjusted net cash from operating activities for FY 2025, returning $4 billion to shareholders with a payout ratio of 67%, showcasing strong cash flow management.
- Dividend Increase: The company raised its quarterly dividend by over 6% to $1.20 per share on January 22, currently offering an annual dividend yield of 2.61%, further enhancing its appeal to investors.
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Valero Energy Corporation Q4 2025 Earnings Highlights
- Record Financial Performance: Valero achieved a net income of $1.1 billion or $3.73 per share in Q4 2025, significantly up from $281 million or $0.88 per share in Q4 2024, demonstrating the company's exceptional performance amid strong refining margins and market demand.
- Increased Refining Capacity Utilization: The fourth quarter saw refining throughput reach 3.1 million barrels per day with a utilization rate of 98%, marking record highs for both the quarter and the full year, reflecting the company's ongoing progress in operational efficiency and market adaptability.
- Increased Shareholder Returns: The company announced a 6% increase in quarterly cash dividends to $3.73 per share, with total shareholder cash returns of $1.4 billion for the quarter, indicating a strong commitment to shareholder value while maintaining financial health and boosting investor confidence.
- Future Investment Plans: Valero expects capital investments of approximately $1.7 billion for 2026, with $1.4 billion allocated to sustaining operations and the remainder to optimization projects, highlighting the company's focus on efficient capital allocation and risk management while pursuing growth.
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