Citi Has Hold On Valero

Citi Investment Research is out with a research report on Valero (NYSE: VLO) and it has a Hold rating and a $31 price target on shares.

In a note to clients, Citi Investment Research writes, "We believe the focal point of the deal is Meraux's hydroprocessing capability. Valero is spending $1.36 bn ($27K per bbls/day) to construct at 50kbod hydrocracker at the St. Charles refinery. Meraux's acquisition at $325mm implies $10K per bbl/day of hydrocracking capacity (assuming inventory could be rationalized). At $447 per complex barrel, ($212 excluding inventory) the transaction price is one of the cheaper transactions seen in the last few years."

Shares of VLO closed at $21.94 on Friday.