Valero Energy VLO

Reference table

1. The June 2026 quarter, and what caused it

All figures from the 10-Q filed 2026-07-30 and the vendor's inc_q and earn_cal blocks, with the basis stated at each point.

Read the operating-income column and the whole story is there: MINUS $900M, $997M, $1,509M, $1,575M, $1,731M, and then $5,196M. The June 2026 quarter produced more operating income than the previous four quarters combined.

Five consecutive beats, and the last four are large: +30.3%, +20.0%, +16.8%, +33.5%, +24.0%. Consensus has been chasing this margin for a year.

The company's own explanation, from the 10-Q's Overview, verbatim:

> "Our results for the second quarter and first six months of 2026 benefited from strong global demand for petroleum-based transportation fuels amid constrained worldwide supply. Geopolitical developments continued to disrupt global commodity markets and further limited refining capacity, exacerbating the imbalance between supply and demand. These conditions led to higher market prices for petroleum-based transportation fuels, as well as increased prices for crude oil and other feedstocks used in their production. Despite higher feedstock costs, the spread between product prices and input costs resulted in strong refining margins during the second quarter and first six months of 2026. However, refining margins remain sensitive to changes in global supply and demand dynamics, feedstock costs, and geopolitical developments, and sustained price volatility or shifts in these factors could impact future results."

And the segment attribution:

> "Refining segment adjusted operating income increased by $4.4 billion primarily due to higher gasoline and distillate (primarily diesel) margins and an increase in throughput volumes, partially offset by a decline in sweet crude oil differentials."

> "An increase in throughput volumes of 57,000 barrels per day had a favorable impact of approximately $200 million."

Note the composition: of the $4.4 billion increase, approximately $200 million is volume. The rest is margin. And note the offset — sweet crude oil differentials DECLINED, meaning Valero's feedstock advantage narrowed even as the product spread widened.

This is the same conflict that produced Marathon Petroleum's quarter elsewhere in this batch, and the same one that took Marriott's international revenue per available room negative and that Emerson's chief executive called "fluid". Four of the twelve names in these dives name it in their own filings.

Two operational events that make the quarter more remarkable, and both are absent from the payload

The Port Arthur fire, from the 10-Q, verbatim:

> "On March 23, 2026, our Port Arthur Refinery experienced a fire in one of the refinery's distillate hydrotreater units that prompted a full shut-down of the refinery. The refinery resumed operations in April 2026 at reduced throughput rates and returned to normal throughput rates during the second quarter. We have completed our assessment of the damages and efforts to complete necessary repairs and replacements are in progress. We expect that a substantial portion of the cost of repairs and capital expenditures in 2026 resulting from the incident will be covered by insurance, subject to our self-insured retention. Insurance proceeds may be received in periods different from those in which the related repair costs or capital expenditures are incurred. Uncertainties remain with respect to the ultimate outcomes from this incident..."

The Benicia closure, from the same filing:

> "During the first six months of 2026, we idled the processing units and ceased operation of the fuel production units at our Benicia Refinery, which was completed by the end of April 2026."

Both matter to the forward read and in opposite directions. Port Arthur was down for part of the quarter and is now running normally, so the June figures understate the full-capacity earnings power at these margins. Benicia is gone permanently, so the FY2027 base is structurally smaller — and, in a supply-constrained market, its closure is marginally supportive of the margin the rest of the system earns. Neither event appears anywhere in the vendor payload.

2. Cash, capital return, and the authorisation the payload never saw

From the 10-Q's liquidity discussion, verbatim:

> "Our operations generated $7.0 billion of cash during the first six months of 2026. Also, we issued $850 million of 5.150 percent Senior Notes due March 10, 2036... The cash generated by our operations was used to make $798 million of capital investments in our business and return $3.6 billion to our stockholders through purchases of common stock for treasury and dividend payments. As a result of these items... our cash, cash equivalents, and restricted cash increased by $3.2 billion during the first six months of 2026 to $8.1 billion as of June 30, 2026. We had $12.7 billion in liquidity as of June 30, 2026."

And the prior-year comparison, from the same section: "Our investing activities of $1.0 billion primarily consisted of $1.1 billion in capital investments, of which $109 million related to capital investments made by DGD." That is the FIRST HALF of 2025.

The buyback authorisation — 2026-07-16

From Item 7.01 of the 8-K filed 2026-07-16, verbatim:

> "On February 25, 2026, the board of directors... authorized Valero to purchase shares of its outstanding common stock for a total cost of up to $2.5 billion with no expiration date (the 'February 2026 Program'). As of June 30, 2026, Valero had $1.4 billion remaining available for purchase under the February 2026 Program. On July 16, 2026, the Board authorized Valero to purchase shares of its outstanding common stock for a total cost of up to $5.0 billion with no expiration date, which is in addition to the amount remaining under the February 2026 Program."

The share count, from inc_a and inc_q:

A 27.8% reduction in five years, funded by $15.2 billion of cumulative repurchase (cf_a: $4,577M, $5,136M, $2,875M, $2,598M for FY2022-FY2025) plus the H1 2026 pace. This is the same structural feature as Marathon Petroleum and it is the most durable thing in either file.

Free cash flow — the capex field understates it, and the correction is real

The vendor reports FY2025 capex of $796 million. The 10-Q reports capital investments of $1.1 BILLION in the first half of 2025 alone. Valero's own measure, "capital investments", comprises capital expenditures plus deferred turnaround and catalyst costs plus joint-venture investments; the vendor's capitalExpenditure line evidently captures only the first component. On any reasonable annualisation, FY2025 total capital investments were roughly $2.0-2.2 billion, so the vendor understates the company's own measure by approximately 60%.

Corrected:

We publish 10.1%, not 11.12%, and we show the bridge. This is the CSX / COP defect class in a milder form — the direction is the usual one (the yield is flattered) and the magnitude here is roughly one percentage point on the trailing figure and roughly a third on the FY2025 figure. Note also that even the corrected 10.1% is being earned at a war-driven margin peak, so the economic caution that applies to Marathon Petroleum's yield applies here too.

3. Balance sheet and segments

Two observations. Goodwill and intangibles total $383 million on $57,988 million of assets — 0.66%. Book value is essentially entirely tangible, which is unusual in this batch (MRSH, MAR, WM and EMR all carry negative tangible book) and is the single cleanest balance sheet in the twelve. And leverage is trivial: net-debt-to-EBITDA of 0.262x against $12.7 billion of liquidity.

seg_prod FY2025 — ACCEPTED with a note. Refining $116,166M + Ethanol $4,977M + Renewable Diesel $4,753M = $125,896M against $122,687M of revenue, 102.6% — a 2.6% overrun consistent with intersegment sales that the block does not eliminate. The composition is informative: Refining is 92.3% of the total; Renewable Diesel FELL from $5,066M (FY2024) to $4,753M (FY2025), down 6.2%; Ethanol rose from $4,486M to $4,977M.

seg_geo FY2025 — used with a caveat. United States $87,819M (71.6%) + United Kingdom and Ireland $15,830M (12.9%) + Canada $8,137M (6.6%) + Other Countries $5,733M (4.7%) = $117,519M against $122,687M — 95.8%, a 4.2% shortfall. The block is short but not broken, and unlike WM and MAR in this batch it retains its domestic line.

4. Valuation — priced in or room?

At $308.73 (market cap $88.89B, ~287.9M shares implied; 294.0M diluted weighted-average in the June quarter):

Estimate coverage is thin and dispersion is extreme. 10 analysts on FY2026, 11 on FY2027, only 5 on FY2028. The FY2027 EPS range of $13.577 to $39.313 is a 190% spread — the widest in this batch by more than double (MPC's was 79%) — and it is an honest statement about a variable set by geopolitics rather than a failure of analysis. The FY2029 and FY2030 rows rest on ONE analyst each ($18.29 and $11.38, with FY2030 BELOW FY2029) and are excluded from every conclusion.

The shape of the consensus is the point: $37.66 → $26.67 → $19.50, a 48% decline over two years, with revenue falling 13.1% then 10.9%. Consensus explicitly models the current earnings as a peak, and the 8.2x current-year multiple is not cheapness — it is the standard refiner configuration at the top of a cycle.

est.ebitdaAvg and est.ebitAvg are REJECTED for TWO independent reasons. First, the fixed-ratio signature: ebitdaAvg is exactly 7.081% of revenueAvg and ebitAvg exactly 5.064% in every year FY2026 through FY2030. Second: netIncomeAvg EXCEEDS ebitAvg in FY2026 ($11,754M against $7,375M — by 59%) and FY2027 ($7,245M against $6,407M), which is impossible for a company paying $556M of interest and tax at 22.7%. Tested against the actual: FY2025 EBITDA of $6,719M on $122,687M is a 5.48% margin against the block's 7.081% — 29% too high — and, as on MPC, a fixed margin cannot describe a business whose quarterly operating income went from MINUS $900M to $5,196M in five quarters. All forward valuation uses epsAvg. Twenty-first consecutive name.

Peer set is good. E, EOG, ET, KMI, MPC, MPLX, PSX, SLB, SU, TRP. Marathon Petroleum and Phillips 66 are the direct comparables and both are present; Marathon is in this same research batch and closed at $312.61 against Valero's $308.73 — within 1.3% of each other. The payload carries no peer estimates, so no multiple comparison is computed.

4a. What today's price assumes (the inversion)

At $308.73 — 8.2x FY2026 consensus, 11.6x FY2027 — the price embeds:

• EPS of $37.66 in 2026, falling to $26.67 in 2027 and $19.50 in 2028. (Consensus; 10, 11 and 5 analysts.) The first half delivered $16.76 ($4.22 + $12.54), so FY2026 needs $20.90 in the second half — and the Q3 consensus of $14.07 is ABOVE the $12.54 just delivered, implying $6.83 for Q4. So consensus expects margins to widen further in the September quarter and then normalise sharply in December.
• Refining margins do not return to 2024-25 levels. (Our derivation.) Valero's operating income ran between MINUS $900M and $1,731M in the five quarters before June 2026 and $5,196M in it. This is the most fragile assumption in the price and it is fragile in both directions — the FY2027 range of 190% is the covering community saying so out loud.
• The buyback continues at roughly $5-6 billion a year. (Our number, from $3.6 billion of total shareholder return in six months.) $6.4 billion of authorisation is 7.2% of the market capitalisation, and the share count has already fallen 27.8% in five years. This is the largest single contributor to the expected return and it is the part least dependent on the crack spread — though it is funded by it.
• Port Arthur runs normally and the insurance recovery arrives. (Company disclosure, half-weighted.) The refinery was fully shut from 2026-03-23, ran at reduced rates in April, and returned to normal in the second quarter; a "substantial portion" of cost is expected to be insured, timing uncertain, and "uncertainties remain."
• The market keeps paying roughly 10-12x the following year's consensus. (Our number.) At 8x FY2027E the stock is $213; at 14x it is $373. Refiners trade 6-10x at peak earnings and 15-25x at trough earnings, which is why the multiple is a poor anchor and why the fair-value range below is deliberately very wide.

4b. The return bridge (why the multiple moves)

Expected return over the next twelve months decomposes as: EPS growth (MINUS 29.2%, from FY2026E $37.660 to FY2027E $26.675) + multiple re-rating (mechanical EXPANSION from 8.2x to 11.6x at a constant price) + shareholder yield (+8.0%).

As with Marathon Petroleum, the forward-multiple rolldown here is MECHANICAL and is not re-rating. 8.2x becoming 11.6x as the estimate year advances at a constant price is arithmetic, and the format guardrail exists precisely for this case. The real question is the multiple the market pays on the then-current year.

Our base of $310 is 11.6x FY2027E — exactly the multiple implied by today's price on next year's number. We assume no re-rating in either direction, and the result is that a 29% consensus earnings decline is almost exactly offset by an 8% shareholder yield and a share count falling ~5% a year.

That equilibrium is the finding: Valero's capital return is large enough to neutralise the consensus earnings decline and not large enough to produce a return. It is the identical arithmetic to Marathon Petroleum in this batch, at a slightly lower absolute yield and a slightly higher forward multiple.

4c. Variant perception (where we differ, what would surprise)

• On the level we are 0.06% below the street's $310.20 and 0.4% above spot. We have no variant perception whatsoever and the coincidence of our number with the street's is not manufactured — both are simply today's multiple applied to next year's consensus. The more informative observation is the street's own internal split: 21 of 37 analysts rate Valero Buy, the vendor composite rating is A− (the highest in this batch), and the consensus target is 0.5% above the price. The median target of $331.50 is 7.4% above it. The ratings and the targets have not been reconciled.
• We think the free-cash-flow yield is being read too generously and we correct it. The vendor's 11.12% rests on capex of roughly $800 million; the company's own capital-investments measure was $1.1 billion in the first half of 2025 alone. The corrected trailing yield is approximately 10.1%, and it is being earned at a margin the company itself describes as dependent on geopolitical developments. Anyone screening the S&P 500 on free-cash-flow yield will find Valero near the top of the list on a number that is both overstated and cyclical.
• We think the two operational events cut in opposite directions and neither is in consensus. Port Arthur was fully shut for part of the quarter and is now running normally — so the record June result was achieved with a large refinery below capacity, and the September quarter has that capacity back. Benicia's fuel production has permanently ceased — so the FY2027 volume base is structurally smaller. Watchable number: throughput volumes in the 2026-10-22 print, which will be the first quarter clean of both.
• We take the knowledge base's single name-level claim as a warning rather than an endorsement. warren_pies, 2022-05-13, bullish 80, naming Valero, Phillips 66 and Marathon: "Gulf Coast independents run a 2-1-1 (heavy diesel) crack and make even more money." The mechanism it describes is exactly the one operating today. It was made at the 2022 peak, and Valero's diluted earnings per share subsequently fell from $29.00 (2022) to $24.95 (2023) to $8.58 (2024) to $7.57 (2025). The claim was right about the moment and wrong about the durability, and that is the most decision-relevant fact the store contains.
• Positive surprise that would force a re-rate: Refining margins holding into the December quarter, i.e. past the summer driving season — which would falsify the knowledge base's one bearish crack-spread claim on its own stated test; or a large insurance recovery on Port Arthur; or the $6.4 billion authorisation being executed inside twelve months, which at these prices would retire roughly 7% of the company.
• Negative surprise that would break the thesis: a Middle East ceasefire or the reopening of disrupted supply routes; refining margins reverting toward the 2024-25 level, which took operating income to between MINUS $900M and $1,731M a quarter; a refined-product export ban or windfall levy, which the knowledge base's wider lane records as "still on the table"; a further operational incident after Port Arthur; or the buyback being throttled.

Synthos fair values

All three anchors are multiples of the FY2027 consensus EPS distribution (mean $26.675, low $13.577, high $39.313, 11 analysts). The range is the widest in this batch because the underlying estimate range is 190% wide, and a narrower fair-value range would be false precision about a war.

• Bear ~$195 — 7.3x the FY2027 consensus MEAN of $26.675, or 14.4x the FY2027 LOW of $13.577. Cross-check: 5.2x FY2026E; 48.0% above the 52-week low of $131.77; approximately 2.0x tangible book of $96.15. The scenario: the conflict de-escalates, refining margins revert toward the levels that produced a MINUS $900M operating quarter in March 2025, FY2027 lands near the low of the range, and the market applies a trough multiple to normalising earnings while the buyback slows. −36.8%.
• Base ~$310 — 11.6x the FY2027 consensus MEAN of $26.675, i.e. today's multiple on next year's number. Cross-check: 8.2x FY2026E; 15.9x FY2028E; 1.5% below the 52-week high; 3.2x tangible book; 0.06% below the street's consensus target. The scenario: margins normalise roughly as consensus models, the ~8% shareholder yield and the ~5% annual share-count reduction offset the earnings decline, Port Arthur runs clean, and the multiple on the then-current year does not move. +0.4%.
• Bull ~$410 — 10.4x the FY2027 consensus HIGH of $39.313, i.e. the same multiple applied to the top of a very wide range rather than a higher multiple on the mean. Cross-check: 10.9x FY2026E; 30.2% above the 52-week high; 4.3x tangible book. The scenario: the capacity destruction proves structural, the Benicia-type closures continue industry-wide, margins hold near current levels through 2027, and the $6.4 billion authorisation retires 7% of the share count. +32.8%.

Base is 0.4% above spot; asymmetry 0.89:1 (36.8% down, 32.8% up), plus an ~8.0% shareholder yield. A base case within half a per cent of spot with a payoff ratio below one is a Hold, and the very wide range around it is the honest representation of a business whose earnings are set by a conflict.

5. Knowledge base — one claim, and it was made at the last peak

Raw hits on a case-sensitive sweep of VLO / Valero / Valero Energy plus free text on Valero: ONE. Name-level entity claims: 1. Used: 1. Discarded: 0.

The single claim, verbatim:

> 2022-05-13 · BULLISH · conviction 80 · horizon: thesis · entities: Valero, Phillips 66, Marathon · channel: warren_pies · skill 1.0

> "Gulf Coast independents run a 2-1-1 (heavy diesel) crack and make even more money; integrateds also attractive as crude/product spreads narrow."

Three things about it.

It is a genuine name-level claim and it names the mechanism precisely. A 2-1-1 crack — two barrels of gasoline and one of distillate from three of crude — weighted toward diesel is exactly what the 10-Q describes producing the June quarter: "higher gasoline and distillate (primarily diesel) margins." It is the most on-point claim in the store for any name in this batch.

It is four years old and it was made at the last peak. May 2022 was within weeks of the previous crack-spread maximum. Valero's diluted earnings per share subsequently ran $29.00 (2022), $24.95 (2023), $8.58 (2024), $7.57 (2025) — a 74% decline over three years — before the current spike. The claim was correct about its moment and silent about its durability, and it is graded that way.

The wider thematic lane is documented in full in the Marathon Petroleum dive in this batch and is not re-scored here. That lane comprises nineteen case-sensitive claims on crack spreads and refining margins, six of them dated 2026 and running six bullish to one bearish, with doomberg supplying 32% of it and every doomberg claim bullish — a concentration finding recorded there. The single bearish claim bears directly on Valero and carries a resolvable test:

> 2026-06-26 · bearish · conviction 55 · horizon: fact · entities: gasoline · channel: forward_guidance · speaker: Quinn

> "Gasoline hasn't followed crude down and crack spreads are surging on depleted product reserves, but once past peak summer driving season the gap should close."

> TEST: "crack-spread gap closes after the summer months"

That test resolves in the quarter Valero reports on 2026-10-22.

Conclusion. Breadth 1, claim count 1, net conviction POSITIVE BUT STALE. The store's one view on this company is a four-year-old bullish claim made at the previous peak, and the three years of earnings decline that followed it are the most useful calibration available.

6. Data integrity — what we rejected and why

Eight findings.

1. capitalExpenditure UNDERSTATES the company's own capital-investments measure by roughly 60% — the free-cash-flow yield is CORRECTED. The vendor reports FY2025 capex of $796M; the 10-Q reports capital investments of $1.1 billion in the first half of 2025 alone, and $798 million in the first half of 2026. Valero's measure comprises capital expenditures plus deferred turnaround and catalyst costs plus joint-venture investments; the vendor line evidently captures only the first. Corrected: FY2025 free cash flow of approximately $3.8 billion rather than the reported $5,030M — a 32% overstatement — and a trailing free-cash-flow yield of approximately 10.1% rather than the reported 11.12%. The CSX / COP defect class, direction as usual (the yield is flattered), magnitude roughly one percentage point on the trailing figure.

2. inc_q and earn_cal report DIFFERENT June-quarter revenue and the archive cannot reconcile them. inc_q reports $36,649M; earn_cal revenueActual reports $44,476M — a 21.4% discrepancy. Both blocks agree on net income and earnings per share (inc_q net income $3,720M matches the 10-Q's "$3.7 billion... of net income attributable to Valero stockholders", and the EPS figures differ only by the GAAP-versus-adjusted $0.08). VLO's filings in this archive were extracted WITHOUT table preservation, so the income statement is not available to settle which revenue basis is correct. We use inc_q throughout because it reconciles to the filing's net income, we state the discrepancy, and we draw no conclusion that depends on the revenue level.

3. est.netIncomeAvg EXCEEDS est.ebitAvg in FY2026 and FY2027 — arithmetically impossible. $11,754M against $7,375M in FY2026 (by 59%) and $7,245M against $6,407M in FY2027. Net income cannot exceed operating income for a company with $556M of interest expense and a 22.7% effective tax rate. Compounded by the fixed-ratio signature — ebitdaAvg exactly 7.081% of revenueAvg and ebitAvg exactly 5.064% in all five forward years — and by a 29% overstatement of the FY2025 actual EBITDA margin (7.081% against 5.48%). As on MPC, the block is structurally incapable of describing a business whose quarterly operating income moved from MINUS $900M to $5,196M in five quarters. All forward valuation uses epsAvg.

4. The FY2029 and FY2030 estimate rows rest on ONE analyst each and are INCOHERENT — EXCLUDED. FY2029 epsAvg is $18.29 and FY2030 is $11.38 — a 38% DECLINE — while revenueAvg RISES from $150,562M to $158,469M. Neither appears in any conclusion.

5. bookValuePerShareTTM and tangibleBookValuePerShareTTM are IDENTICAL at $96.15 — the GS / AXP / MS defect, here with a small magnitude. Valero carries $260M of goodwill and $123M of intangibles, or $1.33 per share on 287.9M shares, so tangible book should be approximately $94.82, not $96.15 — a 1.4% overstatement. The defect is present; the magnitude is immaterial and is recorded rather than corrected. Note separately that shareholdersEquityPerShareTTM of $85.04 differs from bookValuePerShareTTM of $96.15 by 11.6%, which the $2,178M of noncontrolling interest ($7.56 per share) explains only partially; neither field is used and the filing's equity figures are used instead.

6. enterpriseValueTTM OMITS noncontrolling interests. The vendor reports $92,367M against a market capitalisation of $88,892M — an implied net debt of only $3,475M. The $2,178M of minority interest (largely Diamond Green Diesel's partner's share) is not added. Corrected enterprise value is approximately $94,545M and EV/EBITDA moves from 6.97x to approximately 7.13x. The KKR / FCX / SPGI class, and the same defect found on MPC in this batch.

7. TWO MAJOR OPERATIONAL EVENTS AND ONE CORPORATE ACTION ARE ABSENT FROM THE PAYLOAD. (a) The Port Arthur refinery fire of 2026-03-23, which prompted a full shut-down, with resumption in April at reduced rates and normal throughput by the second quarter, and an unquantified insurance recovery. (b) The permanent cessation of fuel production at the Benicia refinery, completed by the end of April 2026. (c) A NEW $5.0 billion share repurchase authorisation approved 2026-07-16, in addition to $1.4 billion remaining under the February 2026 $2.5 billion programme — $6.4 billion of capacity, 7.2% of the market capitalisation. Also absent: the $850 million of 5.150% senior notes due 2036 issued in the first half of 2026. All four were found by reading the filings.

8. seg_geo FY2025 falls 4.2% short of revenue; seg_prod runs 2.6% over. Geography sums to $117,519M against $122,687M (95.8%); segments to $125,896M (102.6%), the overrun consistent with unelminated intersegment sales. Neither is broken and both are used with the caveat stated — notably better than WM and MAR in this batch, both of which lost their domestic geography line entirely.

Filings extracted WITHOUT tables. All six VLO documents carry "tables": false, so the income statement, balance sheet, cash flow statement, segment tables and the refining-margin-per-barrel tables are absent from the text. Every filing-sourced figure in this dive is quoted from narrative prose. The consequences: the revenue discrepancy in finding 2 cannot be settled; refining margin per barrel — the single most informative operating metric, and the one available for MPC in this batch — is unavailable; and segment operating income cannot be read. Reported as gaps.

Quote versus technical blocks. quote.yearHigh/yearLow report $320.24 / $130.78; tech.hi52/lo52 report $314.80 / $131.77. Differences of 1.7% and 0.8%. tech is used throughout. tech.max_dd_from_peak (−1.928%) is identical to tech.pct_from_hi.

Non-equity tripwire — checked and passed. Common stock, NYSE-listed. Price $308.73; beta 0.545; volume 3.32M shares (~$1.03bn of turnover); 52-week band $131.77-$314.80 — a 139% range, the widest in this batch after MPC's 102%, and an accurate description of what this security is. This is common equity.

7. Technicals, insiders and verdict

Technicals

• Price $308.73, +13.2% above the 50-day moving average of $272.79 and +40.3% above the 200-day average of $220.04.
• −1.9% from the 52-week high of $314.80; +134.3% above the low of $131.77. Position in the annual range: 97th percentile — the highest in this batch.
• RSI 62.7 — strong but not overbought, which after a 134% move from the low describes a steady rather than parabolic advance. MACD +10.78.
• Maximum drawdown from peak: −1.9%, identical to the current distance from the high.
• Relative performance: 3-month +22.7% vs SPY +7.6%; 6-month +71.3% vs SPY +11.1%; 12-month +131.8% vs SPY +24.3% and QQQ +30.8%. The best absolute and relative performance of any name in these twelve dives, at every horizon.
• Sentiment: 1 strong buy, 20 buy, 15 hold, 1 sell across 37 analysts; consensus label Buy; vendor composite rating A− with an overall score of 4 — the highest in this batch. Consensus target $310.20 — 0.5% above spot; median $331.50 (+7.4%); high $357 (+15.6%); low $203 (−34.2%).

Today's move. VLO closed UP 0.39% at $308.73 from $307.54, opening at $305.00 and trading $300.01 to $311.365 on 3.32M shares. No company-specific filing is dated 2026-08-04; the last was the 2026-07-30 results.

The honest read: the 97th percentile of the annual range, after a 134% advance from the low, with a consensus target half a per cent away. There is no entry here and no exit signal either. This is a position to hold or not to have.

Insiders — three sales by a retiring executive, and the filings explain them

The reading, and the filings supply the explanation the insider block does not.

From Item 5.02 of the 8-K filed 2026-05-08: "On May 7, 2026, Eric A. Fisher, Senior Vice President Product Supply, Trading and Wholesale of Valero Energy Corporation... informed Valero that he intends to retire on or about July 1, 2026. In the interim, Mr. Fisher plans to help transition his responsibilities internally as part of Valero's succession plan."

All three sales are by a named executive who announced his retirement on 7 May and retired on 1 July. They are evenly sized (7,500 shares each), evenly spaced (18 May, 18 June, 29 June) and take his position from 42,242 to 19,742 — a 53% reduction — at prices from $236.90 to $268.17, all 13-23% BELOW today's close. A retiring executive liquidating half a position across three tranches over six weeks is routine and carries no view on the business, and it is reported as routine rather than counted as a bearish insider signal.

The two director stock-unit awards are mechanical, granted 2026-05-07 at a $200,000 value per the annual director compensation programme disclosed in Item 8.01 of the same 8-K, vesting at the 2027 annual meeting with a further one-year holding period. There is not one open-market purchase in the file.

Verdict

Hold.

The arithmetic. At $308.73 Valero trades at 8.2x the FY2026 consensus of $37.660 and 11.6x FY2027's $26.675, against a consensus that models a 48% earnings decline over two years. Our base fair value of $310 is 0.4% above spot with 0.89:1 asymmetry ($195 bear, $410 bull), plus an ~8.0% shareholder yield. The street's consensus target is $310.20, 0.5% above the close, and our number lands within 0.06% of it — not by design but because both are today's multiple applied to next year's consensus.

What is genuinely excellent. A June quarter with operating income of $5,196M against $997M and net income attributable to Valero of $3.7 billion against $714 million — more operating income than the previous four quarters combined — beating consensus by 24.0%. $7.0 billion of operating cash in six months, $12.7 billion of liquidity, net-debt-to-EBITDA of 0.262x, and a balance sheet that is 99.3% tangible. A new $5.0 billion buyback authorisation on 2026-07-16 taking capacity to $6.4 billion, 7.2% of the market capitalisation, on top of a share count already down 27.8% in five years. And the record quarter was produced while the Port Arthur refinery was recovering from a March fire and the Benicia refinery's fuel production was being permanently shut.

What keeps it at Hold.

First, the earnings are a war, and the company says so. "Geopolitical developments continued to disrupt global commodity markets and further limited refining capacity." Refining segment adjusted operating income rose $4.4 billion, of which approximately $200 million was volume.

Second, consensus already models the decline and the price reflects it. $37.66 → $26.67 → $19.50. 8.2x is the standard refiner configuration at a peak, not cheapness.

Third, the asymmetry is below one — 32.8% up against 36.8% down — and the FY2027 estimate range is 190% wide on eleven analysts, the widest in this batch by more than double.

Fourth, the entry is at the 97th percentile of the annual range after a 134% advance from the low, with a consensus target 0.5% away.

Fifth, the knowledge base's single name-level claim is a bullish call made at the 2022 peak, after which earnings per share fell 74% over three years.

The reason this is a Hold and not an Avoid is the same as at Marathon Petroleum: the ~8% shareholder yield is large enough to neutralise the consensus earnings decline, the balance sheet has essentially no leverage and no goodwill, and the industry capacity argument — which Valero is itself reinforcing by closing Benicia — is not frivolous. We do not know what a crack spread does next and we decline to pretend.

Pre-registered KILL criteria — what would take this to Avoid:

• Refining segment operating income back below $1.5 billion in a quarter, i.e. toward the 2025 range.
• A Middle East ceasefire or the reopening of disrupted supply routes, which is the thesis in one headline.
• A US refined-product export ban or windfall levy, which the wider knowledge-base lane records as still on the table.
• The buyback slowing materially below the H1 pace, which removes most of the shareholder yield offsetting the earnings decline.
• A further operational incident, after a full refinery shutdown from fire in March.
• The Port Arthur insurance recovery proving materially smaller than the "substantial portion" the company expects.

Pre-registered UPGRADE conditions — what would take this to Buy — Tactical:

• A price below roughly $235, which is 8.8x FY2027E and restores asymmetry to better than 2:1 against the same base case. This is the operative trigger and it is a price — and note the retiring senior vice-president sold at $236.90 in June.
• Refining margins holding into the December quarter, past the summer driving season, which would falsify the knowledge base's one bearish crack-spread claim on its own stated test.
• The $6.4 billion authorisation executed inside twelve months, retiring roughly 7% of the company.
• A quantified Port Arthur insurance recovery.
• Insider buying, of which there is none.

Where VLO fits in the Synthos Framework Portfolio. No position, and the same sizing logic as Marathon Petroleum in this batch applies: this is an unhedged position on a geopolitical conflict wearing an 8x multiple. The disciplined action is a limit at roughly $235 and patience; the undisciplined action is to buy the 97th percentile of a 139%-wide annual range because the current-year multiple looks low. For an existing holder this is a trimming decision rather than a selling one, because the shareholder yield and the balance sheet are both genuinely strong. Logged as a tracked Synthos call (Hold) as of 2026-08-04 at $308.73, with the fair-value anchors, kill criteria and the $235 trigger all gradeable.

Single biggest risk: a ceasefire. Valero's Refining segment adjusted operating income rose $4.4 billion year on year because, in its own words, "[g]eopolitical developments continued to disrupt global commodity markets and further limited refining capacity, exacerbating the imbalance between supply and demand." Approximately $200 million of that $4.4 billion was volume; the rest was margin. The company's own filing adds the qualifier: "refining margins remain sensitive to changes in global supply and demand dynamics, feedstock costs, and geopolitical developments, and sustained price volatility or shifts in these factors could impact future results." The one claim in this knowledge base that names Valero made the identical structural argument in May 2022, after which earnings per share fell from $29.00 to $7.57 over three years. We are not taking a view on a war.

Provenance & disclosures

• Traceability: 1 knowledge-base claim names Valero (case-sensitive raw hits 1, name-level 1, used 1, discarded 0; breadth 1, net conviction positive-stale). The claim — warren_pies, 2022-05-13, bullish 80, horizon thesis, entities Valero / Phillips 66 / Marathon — is "Gulf Coast independents run a 2-1-1 (heavy diesel) crack and make even more money; integrateds also attractive as crude/product spreads narrow." It names the exact mechanism now operating and it was made at the previous refining peak, after which Valero's diluted earnings per share fell from $29.00 (2022) to $24.95 (2023) to $8.58 (2024) to $7.57 (2025) — a 74% decline over three years. It is graded as right about its moment and silent about durability, and that calibration is the most decision-relevant thing the store contains for this name. The wider thematic lane on crack spreads and refining margins — nineteen case-sensitive claims, six dated 2026, running six bullish to one bearish, with doomberg supplying 32% of it and every doomberg claim bullish — is documented in full in the Marathon Petroleum dive in this batch and is not re-scored here; its single bearish claim (forward_guidance, 2026-06-26, speaker Quinn, conviction 55, TEST: "crack-spread gap closes after the summer months") resolves in the quarter Valero reports on 2026-10-22.
• Data as-of: fundamentals — quarterly results, the Overview attribution, the Port Arthur and Benicia disclosures, the liquidity and capital-investment figures and the segment commentary through 2026-06-30 from the 10-Q filed 2026-07-30; annual statements through 2025-12-31 from the 10-K filed 2026-02-25 · estimates 2026-08-04 · prices 2026-08-04, quote timestamp 1785873602 = 2026-08-04T20:00:02Z ($308.73, +0.39%; 50-DMA $272.79; 200-DMA $220.04; RSI 62.7; MACD +10.78) · knowledge-base claims 2026-08-04. The fiscal year is the calendar year. All figures come from the Synthos vendor data file for VLO or from the SEC filings in the VLO archive; no figure comes from memory, recall or external retrieval.
• Filing archive contents and a limitation: 10-K filed 2026-02-25 (fiscal 2025); 10-Q filed 2026-04-30 (March 2026 quarter); 10-Q filed 2026-07-30 (June 2026 quarter — the primary source for this dive); 8-K filed 2026-05-08 (Item 5.02 — Eric A. Fisher's retirement notice of 2026-05-07 effective on or about 2026-07-01; Item 5.07 annual-meeting results; Item 8.01 director stock-unit awards at a $200,000 value); 8-K filed 2026-07-16 (Item 7.01 — the NEW $5.0 billion repurchase authorisation of 2026-07-16 and the $1.4 billion remaining under the February 2026 $2.5 billion programme); 8-K filed 2026-07-30 (Item 2.02, second-quarter results; exhibit not extracted). ALL SIX DOCUMENTS WERE EXTRACTED WITHOUT TABLE PRESERVATION ("tables": false), so the income statement, balance sheet, cash flow statement, segment tables and — most consequentially — the refining-margin-per-barrel tables are absent from the text. Every filing-sourced figure in this dive is quoted from narrative prose. Refining margin per barrel, the single most informative operating metric and the one available for Marathon Petroleum in this batch, is unavailable for Valero. Reported as a gap.
• Where the vendor was REJECTED or CORRECTED: capitalExpenditure, which reports FY2025 capex of $796M against the 10-Q's disclosure of $1.1 BILLION of capital investments in the first half of 2025 alone — Valero's measure comprises capital expenditures plus deferred turnaround and catalyst costs plus joint-venture investments, and the vendor line captures only the first; corrected FY2025 free cash flow is approximately $3.8 billion rather than $5,030M (a 32% overstatement) and the trailing free-cash-flow yield approximately 10.1% rather than 11.12% — the CSX/COP class. inc_q and earn_cal June-quarter revenue, which differ by 21.4% ($36,649M against $44,476M) with no way to settle the basis because the income-statement tables were stripped; inc_q is used because it reconciles to the filing's net income, and no conclusion depends on the revenue level. est.netIncomeAvg EXCEEDING est.ebitAvg in FY2026 ($11,754M against $7,375M, by 59%) and FY2027, arithmetically impossible, compounded by the fixed-ratio signature (ebitdaAvg exactly 7.081% of revenueAvg, ebitAvg exactly 5.064%, every forward year) and a 29% overstatement of the FY2025 actual EBITDA margin; all forward valuation uses epsAvg. The FY2029 and FY2030 rows, each on ONE analyst and internally incoherent (EPS falls 38% while revenue rises) — excluded. bookValuePerShareTTM and tangibleBookValuePerShareTTM IDENTICAL at $96.15 despite $383M of goodwill and intangibles — the GS/AXP/MS defect, magnitude 1.4% and immaterial, recorded not corrected. enterpriseValueTTM of $92,367M, which omits $2,178M of noncontrolling interests (largely Diamond Green Diesel's partner) — corrected to approximately $94,545M, taking EV/EBITDA from 6.97x to approximately 7.13x; the KKR/FCX/SPGI class and the same defect found on MPC in this batch. quote.yearHigh/yearLow ($320.24/$130.78) differ from tech.hi52/lo52 ($314.80/$131.77) by 1.7% and 0.8%; tech is used.
• Where the vendor was acceptable: seg_prod sums to 102.6% of revenue (unelminated intersegment sales) and seg_geo to 95.8% — both short of perfect and neither broken, and notably better than WM and MAR in this batch, which lost their domestic geography line entirely. Both are used with the caveat stated.
• Corporate actions and operational events absent from the payload — FOUR: (1) the Port Arthur refinery fire of 2026-03-23 prompting a full shut-down, with resumption in April at reduced rates, normal throughput in the second quarter, and an unquantified expected insurance recovery; (2) the permanent cessation of fuel production at the Benicia refinery, completed by the end of April 2026; (3) the NEW $5.0 billion repurchase authorisation of 2026-07-16, in addition to $1.4 billion remaining under the February 2026 programme — $6.4 billion, 7.2% of the market capitalisation; and (4) the issuance of $850 million of 5.150% senior notes due 2036 in the first half of 2026. All four were found by reading the filings.
• Estimate coverage: 10 analysts on FY2026 EPS, 11 on FY2027 — the anchor for all three fair values, with a range of $13.577 to $39.313, a 190% spread that is the widest of any name in this batch by more than double; only 5 on FY2028 (range 154% wide); 1 each on FY2029 and FY2030, excluded. The dispersion is not a data defect — it is the honest state of knowledge about a crack spread.
• Peer note: the vendor peer set — E, EOG, ET, KMI, MPC, MPLX, PSX, SLB, SU, TRP — contains both direct comparables (Marathon Petroleum, Phillips 66). Marathon Petroleum is in this same research batch and closed at $312.61 against Valero's $308.73 — within 1.3% of each other, on near-identical arithmetic and an identical verdict. The payload carries no peer estimates, so no multiple comparison is computed.
• Fair-value caveat: the $195 / $310 / $410 anchors are multiples of the FY2027 consensus EPS distribution — 7.3x the mean at the bear, 11.6x the mean at the base, and 10.4x the high of $39.313 at the bull — cross-checked against FY2026 and FY2028 estimates, against tangible book value of $96.15 per share and against the 52-week range. Stated arithmetic, not a discounted cash flow. The range is the widest in this batch because the underlying FY2027 estimate range is 190% wide; a narrower range would be false precision about a variable set by a conflict. The base applies today's implied multiple to next year's number and assumes no re-rating, so a 29% consensus earnings decline is offset by an approximately 8% shareholder yield and a roughly 5% annual reduction in the share count. The rolldown from 8.2x FY2026E to 11.6x FY2027E at a constant price is MECHANICAL and is nowhere described in this dive as re-rating.
• Basis note: earn_cal epsActual is on an adjusted basis and differs from inc_q GAAP diluted EPS by $0.08 or less in every quarter of the last five, so the adjustment burden on this name is negligible and the beat percentages are effectively like-for-like. The trailing multiple of 12.6x uses the vendor's trailing per-share figure.
• Timing: second-quarter results were released 2026-07-30, five days before this dive, and beat consensus EPS by 24.0% ($12.54 against $10.11) — the fifth consecutive beat and the fourth large one. The next print is 2026-10-22, 79 days away, against consensus of $14.07 in EPS and $37,775M of revenue — note that the Q3 consensus EPS is ABOVE the $12.54 just delivered. The three insider sales in the file are all by Eric A. Fisher, who announced his retirement on 2026-05-07 and retired on or about 2026-07-01, at prices 13-23% below today's close, and are reported as routine rather than as a bearish signal. 2026-08-04 carried no company-specific filing.
• Accessibility note: no information in this dive is conveyed by colour. All emphasis is carried by bold text, table structure and explicit labelling.
• Not investment advice. Independent research, educational and informational only, never personalised. No recommendation to buy, sell or hold any security is made to any person.
• Version: 2026-08-04-full.