Yahoo Finance Valero Energy Corporation Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
Last week saw the newest first-quarter earnings release from Valero Energy Corporation (NYSE:VLO), an important milestone in the company's journey to build a stronger business. Revenues US$32b disappointed slightly, at4.1% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of US$3.75 coming in 14% above what was anticipated. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Valero Energy
Taking into account the latest results, Valero Energy's ten analysts currently expect revenues in 2024 to be US$136.0b, approximately in line with the last 12 months. Statutory earnings per share are expected to decline 18% to US$17.59 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$136.2b and earnings per share (EPS) of US$16.58 in 2024. So the consensus seems to have become somewhat more optimistic on Valero Energy's earnings potential following these results.
The consensus price target was unchanged at US$178, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Valero Energy, with the most bullish analyst valuing it at US$205 and the most bearish at US$128 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Valero Energy's revenue growth is expected to slow, with the forecast 1.7% annualised growth rate until the end of 2024 being well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.1% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Valero Energy.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Valero Energy's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Valero Energy's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$178, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Valero Energy analysts - going out to 2026, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for Valero Energy (1 is concerning!) that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
