Valero Energy Corporation (NYSE:VLO) is scheduled to report Q3 earnings results on October 22, 2020.
The company is expected to report earnings of -$1.20/share on revenue of $14.787 billion. The consensus earnings per share (EPS) of -$1.20/share is based on a poll of 13 analysts and represents a decline in eps of −181.3% over the same quarter last year, when the company reported earnings of $1.48/share.
The revenue forecast of $14.787 billion based on a poll of 7 analysts implies a year-over-year (YoY) decline in revenue of −45.7%. Last year the company reported $27.249 billion in revenue for the quarter.
|Metric||Expected||Prior Year||YoY Change|
Earnings Call Trends
Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.
What are your expectations from Valero Energy Corporation for earnings this quarter? Let us know in the comments!
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −5.8%.
|Report Date||Price Day Prior||Price Next Day||Change %||Result|
|July 30, 2020||$59.69||$56.23||−5.8%||Decline|
|April 29, 2020||$57.87||$63.35||9.5%||Increase|
|January 30, 2020||$86.46||$84.31||−2.5%||Decline|
|October 24, 2019||$93.85||$99.27||5.8%||Increase|
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.24, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.24 implies a 0.1% chance of earnings manipulation.
Fundamentals And Technical Analysis
Valero Energy Corporation is currently trading at $39.29/share, down −2.3% for the day. The company is trading at approximately 38.5% of its 52-week high of $101.99/share. The company’s stock price is down −30.1% since the last earnings report and down −5.2% over the previous week.
The company’s 14 Day Relative Price Index (RSI) of 29.75 suggests the company is trading in technically oversold territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 15.07 and a forward P/E multiple of −13.94.
Valero Energy Corporation’s current share price also implies a price-to-book (P/B) multiple of 0.81. The following table summarizes some other key fundamental ratios:
|Last Reported Fiscal Period Key||FY2020.Q2|
|Period End Date||June 30, 2020|
|Stock Price (Current)||$39.29|
|P/E Ratio (Fwd)||−13.9x|
|Total Debt / Total Capital||44.6%|
|Levered Free Cash Flow||$1.883 billion|
|EV / EBITDA||6.4x|
Valero Energy Corporation is a large-cap stock with a market capitalization of $16.021 billion and a total enterprise value of $28.411 billion. The company operates in the Energy sector and the Oil, Gas & Consumable Fuels industry.
Valero Energy Corporation manufactures and sells transportation fuels and petrochemical products in the United States, Canada, the United Kingdom, Ireland, and internationally. It operates through three segments: Refining, Ethanol, and Renewable Diesel. The company is involved in oil and gas refining, marketing, and bulk selling activities. It produces conventional and premium gasolines, gasoline meeting the specifications of the California Air Resources Board (CARB), diesel fuels, low-sulfur and ultra-low-sulfur diesel fuels, CARB diesel, other distillates, jet fuels, asphalts, petrochemicals, lubricants, and other refined petroleum products. As of December 31, 2019, the company owned 15 petroleum refineries with a combined throughput capacity of approximately 3.15 million barrels per day. It markets its refined products through wholesale rack and bulk markets; and through approximately 7,000 outlets under the Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco brand names. The company also produces and sells ethanol, distiller grains, and corn oil primarily to refiners and gasoline blenders, as well as to animal feed customers. It owns and operates 14 ethanol plants with a combined ethanol production capacity of approximately 1.73 billion gallons per year. In addition, the company owns, operates, develops, and acquires crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets. Further, it owns and operates a plant that processes animal fats, used cooking oils, and other vegetable oils into renewable diesel. The company was formerly known as Valero Refining and Marketing Company and changed its name to Valero Energy Corporation in August 1997. Valero Energy Corporation was founded in 1980 and is headquartered in San Antonio, Texas.