Dahlman Rose Reiterates Buy Rating on Valero Energy
July 26, 2011 1:29 PM
Dahlman Rose is out with a research report this afternoon, where it reiterates its Buy rating on Valero Energy (NYSE: VLO); it has a $40.00 price target on the stock.
The DR analysts cited the company's recent earnings results, which slightly missed the consensus estimates. OPEX of $3.86/bbl was somewhat higher than the analsyts' forecast, while other items were generally in line.
Within the refining segment, Gulf Coast operations were disrupted by a lightning strike-related outage at Port Arthur, while gross margin of just $3/bbl in its Northeast segment reflects certain seasonal capture factors, along with the broader challenges associated with the light seaborne crude market.
As for valuation, the analysts remarked, “We continue to view the Pembroke acquisition as $0.30 accretive for next year. We reiterate our Buy rating and $40 target, targeting 5x 2012 EV/EBITDA.”
