24/7 Wall St.
10-27-2008, 03:30 PM
24/7 Wall St. Daily News
http://www.247wallst.com/images/2008/10/27/oil_refinery_image.jpg (http://247wallstreet.typepad.com/.shared/image.html?/photos/uncategorized/2008/10/27/oil_refinery_image.jpg)Valero Energy Corp. (NYSE: VLO) is set to report earnings Tuesday morning. First Call has estimates pegged at $1.46 EPS and $36.43 billion in revenues. Oil companies and refiners rarely give guidance, but if Valero does give guidance its earnings for the coming quarter are $0.97 EPS and $26.14 billion in revenues. Be advised that the earnings range is rather wide and the revenue range is only a sample from half of a handful of analysts.
There is one key issue here with the actual earnings expectations outof the company. These estimates have been all over the place as theprice of oil has tanked and as analysts have a hard time decidingwhether lower oil prices are good for refiners or if plunging oilprices hurt as the costs may stay higher than the sell-through prices.
Earlier this month, Moody's actually raised its debt rating to "Baa2"in favor of its investment grade status. Just last week we sawOppenheimer raise its rating to "outperform" and the prior week we sawDeutsche Bank cut its rating to "Hold."
There is an issue here that will really work for Valero if pricesstabilize and get into more of a trading range rather than the patternof straight up prices followed by straight down prices. With a $16.00+share price, this stock trades at roughly 4-times both 2008 and 2009earnings. So unless the company comes in with horrific earnings, then the valuations here are likely to offersome serious support.
At $16.83, this refinery leader's stock is down almost 80% from its 52-week highs.
Jon C. Ogg
October 27, 2008
http://feeds.feedburner.com/~f/typepad/RyNm?i=OzfsM</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=OzfsM) http://feeds.feedburner.com/~f/typepad/RyNm?i=ejrJM</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=ejrJM) http://feeds.feedburner.com/~f/typepad/RyNm?i=jM9wm</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=jM9wm)
complete story here... (http://www.247wallst.com/2008/10/a-final-peek-at.html)
http://www.247wallst.com/images/2008/10/27/oil_refinery_image.jpg (http://247wallstreet.typepad.com/.shared/image.html?/photos/uncategorized/2008/10/27/oil_refinery_image.jpg)Valero Energy Corp. (NYSE: VLO) is set to report earnings Tuesday morning. First Call has estimates pegged at $1.46 EPS and $36.43 billion in revenues. Oil companies and refiners rarely give guidance, but if Valero does give guidance its earnings for the coming quarter are $0.97 EPS and $26.14 billion in revenues. Be advised that the earnings range is rather wide and the revenue range is only a sample from half of a handful of analysts.
There is one key issue here with the actual earnings expectations outof the company. These estimates have been all over the place as theprice of oil has tanked and as analysts have a hard time decidingwhether lower oil prices are good for refiners or if plunging oilprices hurt as the costs may stay higher than the sell-through prices.
Earlier this month, Moody's actually raised its debt rating to "Baa2"in favor of its investment grade status. Just last week we sawOppenheimer raise its rating to "outperform" and the prior week we sawDeutsche Bank cut its rating to "Hold."
There is an issue here that will really work for Valero if pricesstabilize and get into more of a trading range rather than the patternof straight up prices followed by straight down prices. With a $16.00+share price, this stock trades at roughly 4-times both 2008 and 2009earnings. So unless the company comes in with horrific earnings, then the valuations here are likely to offersome serious support.
At $16.83, this refinery leader's stock is down almost 80% from its 52-week highs.
Jon C. Ogg
October 27, 2008
http://feeds.feedburner.com/~f/typepad/RyNm?i=OzfsM</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=OzfsM) http://feeds.feedburner.com/~f/typepad/RyNm?i=ejrJM</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=ejrJM) http://feeds.feedburner.com/~f/typepad/RyNm?i=jM9wm</img> (http://feeds.feedburner.com/~f/typepad/RyNm?a=jM9wm)
complete story here... (http://www.247wallst.com/2008/10/a-final-peek-at.html)