This oil refiner had a great quarter, with profits up 27%, handily beating analyst estimates.
Valero Energy (VLO)
from Energy Strategist
Energy stocks have been red-hot of late, leading the stock market toward new records even as surging domestic production adds to the crude glut on the Gulf Coast. We’re taking the opportunity to book partial profits in four drillers while raising targets on two refiners likely to benefit from cheaper feedstocks in the near future.
In addition to the crude refiners, the domestic energy revival is also benefiting the natural gas liquids processors converting NGLs into liquefied petroleum gas for export.
Gulf Coast refiners are already enjoying a margin boost from the glut of crude on their doorstep. One of our favorite plays on this theme remains Valero Energy (VLO), up 45% since we added it six months ago. The chart looks strong and the price should follow profits higher. We’re raising our price target accordingly. Buy VLO below $63.
Robert Rapier & Igor Greenwald, The Energy Strategist, www.energystrategist.com, 800-832-2330, April 23, 2014