Valero Energy Corporation (VLO)

Valero captures peak cyclical refining earnings in FY2026 supported by robust Gulf Coast throughput and low cash operating expenses of $4.75/bbl. Over the subsequent four years, refining crack spreads normalize toward marginal European hydroskimming economics, driving operating margins down to the 4.0% mid-cycle level. Disciplined capital allocation keeps annual reinvestment between 9.1% and 12.5%, generating solid mid-cycle cash conversion.

• Consolidated revenue reaches $150.95B in FY2026 before contracting -13.51% to $130.56B in FY2027
• Consolidated EBIT margin peaks at 7.5% in FY2026 and normalizes to 4.0% by FY2030
• Full-year 2026 capex steps up to $2.0B, with reinvestment rate normalizing between 9.1% and 12.5%
• Terminal multiple of 9.5x P/E discounted under Ke of 7.9732% and terminal growth of 2.0%