NEW YORK (TheStreet) -- Shares of Valero (VLO - Get Report) are stalling, down 2.41% to $46.23 in afternoon trading on Tuesday, with oil prices approaching a six-year low as traders continue to guess when the six-month long price rout could end, Reuters reports.
So far this week Brent is down about 8%, while U.S. crude is lower by about 5%.
WTI crude for February delivery is trading lower by 1.17% to $45.53 as of 1:18 p.m. ET today.
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Separately, Valero was upgraded by analysts at JPMorgan Chase to "overweight" from "neutral" this morning, saying the company is capturing wider spreads and buying back stock.
San Antonio, TX-based Valero is an independent petroleum refining and marketing company, producing conventional gasoline's, distillates, jet fuel, asphalt, petrochemicals, lubricants, and other refined products.
TheStreet Ratings team rates VALERO ENERGY CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate VALERO ENERGY CORP (VLO) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VALERO ENERGY CORP reported significant earnings per share improvement 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 $4.97 versus $3.75 in the prior year. This year, the market expects an improvement in earnings ($5.95 versus $4.97).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 239.4% when compared to the same quarter one year prior, rising from $312.00 million to $1,059.00 million.
- Net operating cash flow has significantly increased by 744.34% to $1,866.00 million when compared to the same quarter last year. In addition, VALERO ENERGY CORP has also vastly surpassed the industry average cash flow growth rate of -1.95%.
- The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.92 is somewhat weak and could be cause for future problems.
- You can view the full analysis from the report here: VLO Ratings Report