CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target of $145, down $17, reflects a 6.1x multiple of projected 2024 operating cash flows, above VLO’s historical forward average. We reduce our 2023 EPS estimate by $0.35 to $25.65 and raise 2024’s by $1.26 to $16.23. Q3 EPS of $7.49 vs. $7.14 beat consensus estimates by $0.17. In Q3, adjusted EBITDA fell 6% Y/Y, while increasing ~10% sequentially, missing consensus estimates by ~10%. Refining utilization (95%) remained flat Y/Y and rose one percentage point sequentially, while throughput volumes (3.0 mb/d) rose 1% Y/Y and 2% sequentially. Refining margins ($19.47/b) fell ~9% Y/Y, while growing 25% sequentially due to its North Atlantic refining segment (+55%). We think that VLO should stand to benefit in the long run, given that OPEC+ production cuts are expected to remain in effect through 2024, which will likely keep global refined product inventories from being able to keep up with rising demand, assuming energy prices hold. Shares currently yield 3.3%.