Valero Energy Corporation (VLO) Stock Valuation — PE Analysis
Oil & Gas Refining & Marketing · NYSE
Current Price
$348.86
PE Ratio (TTM)
14.5x
Intrinsic Value
$387.41
+10.0% margin of safety
COMPETITIVE MOAT
↑Scale and Operational Efficiency
Valero's extensive network of refineries provides significant economies of scale. This allows for lower per-unit production costs and greater operational flexibility.
↑Strategic Asset Location
Valero's refineries are strategically located near key demand centers and feedstock sources. This minimizes transportation costs and ensures reliable supply chains.
↑Product Diversification
The company refines a diverse range of products, including gasoline, diesel, and jet fuel. This reduces reliance on any single product's market dynamics.
INVESTMENT RISKS
↓Transition to Renewable Energy
The long-term shift towards electric vehicles and renewable energy sources poses a secular threat to demand for traditional transportation fuels.
↓Geopolitical Instability
Global events can disrupt crude oil supply and impact refining operations, leading to price spikes and potential shortages.
↓Intense Industry Competition
The refining sector is highly competitive, with numerous players vying for market share. This can limit pricing power and compress margins.
Base case
VLO base case PE valuation
At a current price of $348.86, the base case PE valuation puts VLO fair value near $387.41 per share. That figure assumes 5.3% yearly earnings growth, a target PE multiple of 14.22x, and a 10% discount rate.
Intrinsic Value
$387.41
Margin of safety
+10.0%
Expected annual return
+2.1%
Base case assumptions: 5.3% annual earnings growth, 14.22x target PE, 10% discount rate, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the VLO PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Valero Energy Corporation respond.
Open PE Calculator for VLOCompany Overview
Valero Energy Corporation functions as a global producer and marketer of transportation fuels and petrochemicals, with operations spanning the United States, Canada, the United Kingdom, Ireland, and other international territories. The company organizes its business across three primary divisions: Refining, Renewable Diesel, and Ethanol. Its Refining segment generates a wide array of products, including various types of gasoline (conventional, premium, reformulated, and California Air Resources Board-compliant), diverse diesel fuels (low-sulfur, ultra-low-sulfur, and CARB diesel), jet fuels, blendstocks, asphalts, petrochemicals, and lubricants. This division also handles the sale of lube oils and natural gas liquids. As of the end of 2021, Valero managed 15 petroleum refineries, boasting a combined daily processing capacity of approximately 3.2 million barrels of crude oil. The Ethanol division comprises 12 plants, capable of producing around 1.6 billion gallons of ethanol annually. These facilities also yield co-products such as dry distiller grains, syrup, and inedible corn oil, which are largely supplied to animal feed markets. Valero distributes its refined goods through wholesale rack and bulk channels, in addition to approximately 7,000 branded retail stations operating under names like Valero, Beacon, Diamond Shamrock, Shamrock, Ultramar, and Texaco. Furthermore, Valero contributes to renewable energy production by owning and operating a facility dedicated to converting animal fats, used cooking oils, and inedible distillers corn oils into renewable diesel. Supporting its extensive operations, the company maintains a comprehensive logistics network that includes crude oil and refined product pipelines, storage terminals, tanks, marine docks, and truck rack bays. Originally established in 1980 as Valero Refining and Marketing Company, the firm adopted its current name, Valero Energy Corporation, in August 1997. Its corporate headquarters are situated in San Antonio, Texas.
Financial Metrics — VLO PE Stock Valuation Data
PE Ratio (TTM)
14.5x
PEG Ratio
0.02
Earnings Yield
7.03%
ROE (TTM)
29.9%
Revenue/Share (TTM)
$452.14
Dividend Yield
1.36%
Debt/Equity
0.45x
Frequently Asked Questions
What is the PE ratio of VLO?
The trailing twelve-month PE ratio of VLO reflects how much investors pay per dollar of Valero Energy Corporation's earnings. This metric is most useful when compared to Oil & Gas Refining & Marketing peers and the company's own historical range.
Is VLO overvalued based on PE ratio?
VLO's PE of 14.5x combined with a PEG ratio of 0.02 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Oil & Gas Refining & Marketing, a DCF analysis may be more appropriate.
How do I value VLO stock using PE ratio?
To value Valero Energy Corporation using PE: (1) Compare the current PE (14.5x) against the Oil & Gas Refining & Marketing median to assess relative pricing, (2) check the PEG ratio (0.02) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of VLO?
VLO's PEG ratio is 0.02, calculated by dividing the PE ratio (14.5x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for VLO stock valuation?
PE ratio gives a quick relative read — how VLO is priced versus Oil & Gas Refining & Marketing peers. DCF provides an absolute value based on projected free cash flows. For VLO, with a strong ROE of 29.9%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See VLO DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Energy valuationsP/E and DCF value VLO with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.