Valero Energy Corporation (VLO) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Valero Energy Corporation

Updated on September 25, 2026 · accounts published on July 30, 2026

Reading of September 25, 2026: A cash-generative refiner at peak margins

Valero Energy trades at a P/E of 15.9× over the last 12 months, 8 % below its sector median, after the stock rose 128 % in a year.

• Is Valero Energy expensive or cheap? It trades at a P/E of 15.9× over the last 12 months, 8 % below its sector median and only 7 % above its own ten-year average.
• How is the business doing? Revenue fell 5.5 % and EPS 11.8 % over the last 12 months, yet the 7.5 % operating margin is nearly double the 4.2 % decade average.
• How strong is the balance sheet? Net debt of $24.50 per share is 6.5 % of the price and 1.0× EBITDA in fiscal 2025, after 11 straight years of dividend rises.
• Does it generate cash through the whole cycle and cover the dividend? Free cash flow yield of 6.1 % over the last 12 months misses the 8 % healthy mark, though free cash flow covers the dividend 3.6×.
• What to expect from the next earnings? Results land on October 22, 2026, with consensus at $18.52 per share after eight consecutive beats.

Is Valero Energy expensive or cheap?

At 15.9× earnings over the last 12 months, Valero Energy sits 7 % above its own ten-year average of 14.8× and 8 % below the 17.2× median of the 198 energy companies in its sector. The stock has changed hands at a lower multiple in 51 % of the quarters of the past decade, so this is the middle of its own range rather than a bargain. EV/EBITDA of 8.6× against a ten-year average of 9.8× is the cheaper reading. Context matters: the shares are up 128 % in 12 months and trade 7 % below their 52-week high of $413.28.

How is the business doing?

Both lines are going backwards: revenue down 5.5 % and EPS down 11.8 % over the last 12 months. Profitability says the opposite. The 7.5 % operating margin of the last 12 months compares with a 4.2 % average across fiscal 2014 to 2025 and with 3.5 % in fiscal 2025 alone, and ROIC of 16.5 % runs 9.2 points above the 7.3 % median of 226 energy peers. The question is durability: ROIC cleared 10 % in only 2 of the last 10 fiscal years and fell to −2.0 % in 2020. Margins today sit near the top of the decade's range.

How strong is the balance sheet?

Leverage is modest for a cyclical: debt to equity of 0.45 and net debt of $24.50 per share in fiscal 2025, equal to 6.5 % of today's price and 1.0× EBITDA, well inside the 2× that energy balance sheets are usually judged against. Liquidity holds up, with a current ratio of 1.64 and an Altman Z of 4.7, in safe territory. The dividend yields 1.2 %, absorbs 60 % of fiscal 2025 earnings and is covered 3.6 times by free cash flow, against the 1.2× considered healthy here, after 11 consecutive years of increases. Piotroski scores 6 of 9.

Does it generate cash through the whole cycle and cover the dividend?

Refiners live off a commodity price they do not control, so what counts is cash across the whole cycle rather than one good year. Valero Energy passes most of that test: free cash flow was positive in 8 of the 10 fiscal years from 2016 to 2025, five-year average ROIC of 12.9 % clears the 10 % bar, net debt is 1.0× EBITDA and the dividend is covered 3.6 times. Two readings fall short. Free cash flow yield of 6.1 % over the last 12 months is under the 8 % considered healthy, and capex at 0.6 % of fiscal 2025 revenue sits far below the sector's usual 10 % to 20 %.

What to expect from the next earnings?

Valero Energy reports on October 22, 2026, and analysts expect $18.52 per share, a clear step up from the $12.54 posted on July 30, 2026, when it beat the $10.11 expected by 24.0 %. That was the eighth consecutive quarter above estimates, which sets a high bar. The estimates themselves have not moved: the 2026 EPS consensus has stayed at $46.94 over the last 10 days across 11 analysts, and the revenue consensus is equally flat. Of the 37 analysts covering the company, 20 say buy, 15 hold and 1 sell.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.