Valero Energy Corporation (VLO) reported a significant increase in Q2 operating income, reaching $4.5 billion, up from $1.3 billion a year ago. The company achieved a refining margin per barrel of $23.62, compared to $12.35 in the same quarter last year. This surge in profitability comes as U.S. gasoline prices have climbed above $4 per gallon, and refining margins have reached historic levels, with the 3-2-1 crack spread nearing $70 per barrel.
Valero’s throughput averaged approximately 3 million barrels per day during this period. The company’s record quarterly adjusted earnings per share (EPS) of $12.54 surpassed analysts’ expectations by 27%. Furthermore, earnings estimates for fiscal years 2026 and 2027 have risen over 30%, indicating strong growth potential.
As of now, Valero trades at a forward earnings multiple of 8X, significantly below the benchmark S&P 500’s 22X, suggesting an attractive valuation in a favorable refining environment.
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