Value
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.6 |
| P/S | 9.9 |
| EV/EBITDA | 6.1 |
| Fwd P/E | 8.9 |
| PEG | 3.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 12.4x
- ▸PEG: 4.08
VLO · Why this verdict
Why Valero Energy (VLO) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Valero has exceeded analyst earnings expectations in each of the four most recent quarters, with an average positive surprise of 25%, including a 33% beat in the most recent quarter, showing consistent outperformance against consensus forecasts. Earnings | Earnings surprise stays positive in at least 3 of the next 4 reported quarters, maintaining the beat streak. | →Stable |
| CounterRefining margins are cyclical and sensitive to crack spread compression; a normalization of margins could quickly reverse the beat trajectory even without any operational misstep. | ||
A Piotroski financial-strength score of 8 out of 9 and high marks for free cash flow quality relative to net income indicate that the business is generating real cash and maintaining a healthy balance sheet despite cyclical pressures. Quality breakdown | Piotroski score stays at 7 or above through the next 2 annual reporting periods. | →Stable |
| CounterHigh financial-health scores are backward-looking; refining companies can see rapid deterioration in these metrics when commodity cycles turn, as working capital and margins compress simultaneously. | ||
Falling on-balance volume and a momentum score of 3.8 below the minimum passing threshold indicate institutional selling pressure is outpacing buying activity, creating a negative technical backdrop despite the stock trading above its 200-day moving average. Momentum breakdown | On-balance volume turns upward and momentum score rises above 5.5 within the next 6 months. | →Stable |
| CounterAn extreme gap-down of 5.4% noted in the technical data may represent a potential reversal point; sharp selloffs near support often mark short-term bottoms in quality names. | ||
The stock currently trades above the analyst consensus price target, producing negative implied upside, which means the risk-reward ratio is unfavorable at current levels even accounting for the strong earnings track record. Targets | Analyst price targets rise by more than 10% above the current price level of $247 within the next 12 months, restoring positive asymmetry. | →Stable |
| CounterAnalyst targets frequently lag significant price moves; multiple analysts recently raised targets according to the news boost flag, and further upgrades could rapidly restore upside. | ||
Valero has exceeded analyst earnings expectations in each of the four most recent quarters, with an average positive surprise of 25%, including a 33% beat in the most recent quarter, showing consistent outperformance against consensus forecasts.
→StableEarnings
- Expectation
- Earnings surprise stays positive in at least 3 of the next 4 reported quarters, maintaining the beat streak.
CounterRefining margins are cyclical and sensitive to crack spread compression; a normalization of margins could quickly reverse the beat trajectory even without any operational misstep.
A Piotroski financial-strength score of 8 out of 9 and high marks for free cash flow quality relative to net income indicate that the business is generating real cash and maintaining a healthy balance sheet despite cyclical pressures.
→StableQuality breakdown
- Expectation
- Piotroski score stays at 7 or above through the next 2 annual reporting periods.
CounterHigh financial-health scores are backward-looking; refining companies can see rapid deterioration in these metrics when commodity cycles turn, as working capital and margins compress simultaneously.
Falling on-balance volume and a momentum score of 3.8 below the minimum passing threshold indicate institutional selling pressure is outpacing buying activity, creating a negative technical backdrop despite the stock trading above its 200-day moving average.
→StableMomentum breakdown
- Expectation
- On-balance volume turns upward and momentum score rises above 5.5 within the next 6 months.
CounterAn extreme gap-down of 5.4% noted in the technical data may represent a potential reversal point; sharp selloffs near support often mark short-term bottoms in quality names.
The stock currently trades above the analyst consensus price target, producing negative implied upside, which means the risk-reward ratio is unfavorable at current levels even accounting for the strong earnings track record.
→StableTargets
- Expectation
- Analyst price targets rise by more than 10% above the current price level of $247 within the next 12 months, restoring positive asymmetry.
CounterAnalyst targets frequently lag significant price moves; multiple analysts recently raised targets according to the news boost flag, and further upgrades could rapidly restore upside.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Valero Energy has delivered four consecutive earnings beats averaging 25% above consensus and maintains a strong financial-health score, but weakening price momentum, falling on-balance volume, and a stock trading above its analyst target combine to limit the near-term investment case in a challenging refining margin environment.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.3 |
| ROA | 4.3 |
| Gross margin | 0.0 |
| Op margin | 2.4 |
| Net margin | 1.8 |
| Current ratio | 5.7 |
| FCF quality | 7.7 |
| Moat | 5.5 |
| Piotroski F | 8.9 |
- ▸Strong Piotroski F-Score: 8/9
Growth
4.1/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 4.1 |
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 9.2 |
| MA position | 9.0 |
| Volume | 0.9 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.7 |
| Analyst rating | 7.4 |
| Price target | 5.0 |
- ▸LLM news sentiment: +0.35 (n=8)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $3,663,845 (0.005% of mkt cap)
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.0 |
| quality rank | 6.9 |
| growth rank | 3.3 |
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.3 |
| support resistance | 1.7 |
| 52w position | 9.5 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.8 |
| days to cover | 6.9 |
| volatility | 3.3 |
| put call | 5.6 |
| implied vol | 4.3 |
| beta | 9.7 |
| debt equity | 8.3 |
Catalyst
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 179.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.9>=5.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.35
- NEWS_BOOST:ANALYST_CLUSTER(8)
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.8=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.78
Upside
-10.3%
Downside
13.1%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 58, MACD bullish
EdgeCatalyst-Driven — Earnings in 26d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Catalyst at 7.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.8=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.78 — supplementary context, not the trigger for this path.
The strongest dimensions are Catalyst at 7.2, Momentum at 6.9, and Risk (lower is worse) at 6.6; the weakest are Peer rank at 4.1, Growth at 4.1, and Technical at 4.2. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.78 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters, ending the consecutive beat streak.
- P2Strong Financial Health Score
Trip ifPiotroski score falls below 6 in any annual reporting period, signaling broad financial health deterioration.
- P3Negative Price Momentum Signal
Trip ifOn-balance volume declines for more than 60 consecutive trading days, confirming sustained distribution.
- P4Analyst Target Premium Risk
Trip ifStock price rises above $270, more than 9% above the current $247, while analyst targets remain below $260, widening the premium-to-target gap further.