(VLO) Valero Energy – Bear of the Day

September 15th, 2009

We reiterate our Underperform rating for Valero (VLO) shares as a combination of weak demand, excess production capacity and narrowing crude quality spreads are expected to weigh on near-term margins.

In addition to the near-term margin issues, commissioning of new refineries and extension projects indicate future struggle as global demand for almost all fuel products (except gasoline) is
trending down.

The medium to long-term outlook also remains cloudy, with unfavorable regulatory changes (growing biofuel mandates) weighing on demand growth and limiting margin gains. Being the largest independent refiner, Valero remains particularly exposed to this unfavorable macro backdrop.

Zacks Investment Research
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More on this topic (What's this?)
Darling International (DAR) In Renewable Diesel Partnership With Valero Energy (VLO) (Green Stocks Central, 9/14/09)
TODAY’S NOTABLE MARKET ACTION (THE PRAGMATIC CAPITALIST, 10/15/09)
Valero: value or value trap? (The Curious Investor, 6/10/09)
Largest U.S. refiner Valero now Permanently Shutting Capacity (The Wikinvest Daily Angle, 11/24/09)
Read more on Valero Energy at Wikinvest


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