Valero Energy Corporation (VLO Quick QuoteVLO - Free Report) is a premier oil refining company and has not witnessed any earnings estimate revisions for 2024 and 2025 over the past seven days.

What’s Favoring VLO?

Valero, currently carrying a Zacks Rank #3 (Hold), is a best-in-class oil refiner involved in the production of fuels and products that can meet the demands of modern life. Its refineries are located across the United States, Canada and the U.K. A total of 15 petroleum refineries, wherein Valero has ownership interests, have a combined throughput capacity of 3.2 million barrels per day. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.     

In its third-quarter transcript, the company mentioned that the Diamond Green Diesel project, focused on producing sustainable aviation fuel, was finalized ahead of its initial timeline and below its anticipated budget. This achievement highlights Valero's strong project management capabilities and reinforces its commitment to efficiently advancing its renewable energy portfolio.

Valero boasts that its premium refining operations are resilient, even when the business operating environment is carbon-constrained. Its refining business has the capabilities to generate handsome cashflows that will allow it to return capital to shareholders and back growth projects.

Risks to VLO’s Business

However, as a premium refiner, the firm’s input costs are highly fluctuating, given the volatile pricing scenario of crude oil. Some other companies that have refining businesses and are likely to get exposed to volatility in oil prices are Marathon Petroleum Corp. (MPC Quick QuoteMPC - Free Report) , Phillips 66 (PSX Quick QuotePSX - Free Report) and Exxon Mobil Corporation (XOM Quick QuoteXOM - Free Report) .

Marathon Petroleum, with its extensive refining operations, manages the largest refining system in the United States.

PSX boasts a diversified business model, with substantial involvement in refining midstream, chemicals and marketing & specialties. Across all its operations, Phillips 66 maintains a strong presence in terms of safety, profitability, scale and competitive advantages.

ExxonMobil also has a strong footing in the global refining business, having roughly 5 million barrels per day of distillation capacity across its 21 refineries.