Bank of America Reiterates Buy on Valero Energy Ahead of Potential Easing of Ethanol Mandate

In a report published Friday, Bank of America analyst Doug Leggate reiterated a Buy rating and $43.00 price target on

. In the report, Bank of America noted, “Regardless of earlier signaling, we view any potential easing as a positive for refiners, particularly as the sector seems to be under-owned at this time. Key beneficiaries in our coverage universe include Buy-rated VLO and Neutral rated HFC, while uncovered PBF retains the most significant exposure. Note VLO has guided annual RIN costs to $600-800mm for 2013 with the risk that this could move significantly higher in 2014 were the blend wall not addressed. This remains our preferred sector name in which we have highlighted the sharp decline in RIN costs that could incrementally benefit the company amidst an otherwise weak earnings backdrop through year-end.” Valero Energy Corporation closed on Thursday at $35.57.