Why Valero Energy (VLO) Stock Is Down Today

NEW YORK (TheStreet) -- Valero Energy  (VLO) fell Wednesday after President Barack Obama's administration granted permission for two U.S. energy companies to export condensate, an ultralight type of crude oil.

The Wall Street Journal reported the administration told Pioneer Natural Resources PXD and Enterprise Product Partners EPD they could export condensate to foreign markets after processing it slightly in a refining unit called a distillation tower. This could mark the most important alteration to the almost 40-year ban on U.S. crude oil exports.

The stock was down 7.79% to $51.63 at 10:05 a.m.

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Separately, TheStreet Ratings team rates VALERO ENERGY CORP as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate VALERO ENERGY CORP (VLO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • VLO's revenue growth has slightly outpaced the industry average of 3.2%. Since the same quarter one year prior, revenues slightly increased by 0.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 30.50% and other important driving factors, this stock has surged by 51.91% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, VLO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • VALERO ENERGY CORP has improved earnings per share by 30.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, VALERO ENERGY CORP increased its bottom line by earning $4.98 versus $3.75 in the prior year. This year, the market expects an improvement in earnings ($6.31 versus $4.98).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income increased by 26.6% when compared to the same quarter one year prior, rising from $654.00 million to $828.00 million.
  • You can view the full analysis from the report here: VLO Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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