NEW YORK (TheStreet) --Shares of Valero Energy Corp. (VLO - Get Report) are up by 1.55% to $59.58 in early afternoon trading on Tuesday, as the rally in oil prices drives some stocks in the sector toward gains.
Crude oil (WTI) is up by 2.08% to $50.62 per barrel and Brent crude is advancing by 2.86% to $61.24 per barrel this afternoon, according to the index provided by CNBC.com.
Concerns over the ongoing fighting in Libya, an OPEC member, and signals that global demand could be growing stronger are helping oil rally today.
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Rival forces in Libya have been carrying out airstrikes on oil terminals and on an airport arousing fears regarding supplies out of the country, Reuters reports.
Oilfields and ports have been increasingly targeted by the two rival governments fighting in Libya.
Additionally, data for U.S. stockpiles for the week of February 27 is due out on Wednesday.
Crude supplies in Cushing, OK, the delivery point for the NYMEX contract, grew by a smaller than expected amount for the same week.
"The pace of Cushing builds may start to ease in the coming weeks, making it less likely the storage center will reach its maximum capacity, Energy Aspects said in an analyst note, the Wall Street Journal noted.
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 largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, notable return on equity and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VLO's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, VALERO ENERGY CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- VLO, with its decline in revenue, slightly underperformed the industry average of 18.7%. Since the same quarter one year prior, revenues fell by 19.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: VLO Ratings Report