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 lower.

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

1. (VLO) Valero Energy- Bear of the DayWe reiterate our Underperform rating for Valero Energy (VLO) shares as a combination of weak...
2. (VLO) Valero Energy Corporation Partners With Darling International Inc for Renewable DieselValero Energy Corporation (VLO) joins hands with Darling International Inc. (DAR) for a joint venture,...
3. (VLO) Valero Energy – Bear of the DayWe reiterate our Underperform rating for Valero (VLO) shares as a combination of weak demand,...
4. (VLO) Valero Energy- Bear of the DayWe reiterate our Underperform rating for Valero (VLO) shares as a combination of weak demand,...
5. (VLO) Valero Energy Closing Unprofitable UnitsTexas-based Valero Energy Corp. (VLO), the largest independent refiner and marketer of petroleum products in...
6. (VLO) Valero Energy Corporation Still StrugglesThe largest oil refiner in the U.S., Valero Energy Corporation (VLO), is deferring its search...

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