The latest first quarter results were released last week. Valero Energy Corporation (NYSE:VLO), a significant milestone in the company's efforts to build a stronger business. Revenue was slightly disappointing at $32 billion, 4.1% below analyst expectations. The outlook for earnings was relatively positive, with statutory earnings per share of US$3.75, 14% above expectations. The analysts have updated their earnings model following these results, but it would be good to know whether they think there's been a big change to the company's outlook, or if it's business as usual. So we've gathered the latest post-earnings forecasts to see what next year can hold.
Check out our latest analysis for Valero Energy.
Taking into account the latest results, Valero Energy's 10 analysts now expect 2024 revenue to be US$136b, about the same as the previous 12 months. Statutory earnings per share are expected to decline 18% to $17.59 over the same period. Before this earnings report, analysts had expected his 2024 revenue to be US$136.2 billion and earnings per share (EPS) to be US$16.58. So it seems like the consensus has become slightly more optimistic about Valero Energy's earnings potential following this result.
The consensus price target remains unchanged at US$178, suggesting that the improved earnings outlook is not expected to have a long-term impact on shareholder value creation. The consensus price target is just the average of the individual analyst targets, so it's useful to see how wide the range of underlying forecasts is. There are mixed views on Valero Energy, with the most bullish analyst valuing it at $205 per share, and the most bearish at $128 per share. As you can see, not all analysts agree on the future of the stock, but the range of expectations is still fairly narrow, which could suggest the outcome is not completely unpredictable.
Looking at the bigger picture here, one way to understand these forecasts is to see how they compare to past performance and industry growth forecasts. We would like to emphasize that Valero Energy's earnings growth rate is expected to slow, with an expected annual growth rate of 1.7% through the end of 2024, well below the historic annual growth rate of 13% over the past five years. I think. For comparison, other companies in the industry that are covered by analysts are expected to grow their revenue at 2.1% per year. So it's clear that while revenue growth is expected to slow, the broader industry is expected to grow faster than Valero Energy.
conclusion
The biggest takeaway for us is the improvement in consensus earnings per share, suggesting a clear improvement in sentiment around Valero Energy's earnings potential next year. Happily, the analysts also reaffirmed their earnings forecasts, suggesting things are in line with expectations. However, our data suggests that Valero Energy's earnings are expected to be worse than the broader industry. The consensus price target remains unchanged at US$178, and the latest forecast is not significant enough to impact the target price.
That said, the long-term trajectory of the company's earnings is far more important than next year. We have his forecasts from multiple Valero Energy analysts out to 2026, available for free on our platform here.
I don't really want it to rain on the parade, but it did rain. 2 warning signs for Valero Energy (1 is a concern!) You should be careful.
Have feedback on this article? Curious about its content? contact Please contact us directly. Alternatively, email our editorial team at Simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
