UPDATE: Deutsche Bank Lowers PT on Valero Energy on Muted Outlook Ahead

In a report published Wednesday, Deutsche Bank analyst Paul Sankey reiterated a Hold rating on Valero Energy VLO, but lowered the price target from $46.00 to $42.00.

In the report, Deutsche Bank noted, “Valero's clean 90c was in line with a recent profit warning, so more important was the conference call outlook. Margins look far rougher in Q3 than Q2, above all differentials have narrowed to the point of - gasp! - a premium of WTI to Brent (back in line with the last 20 years, if not 20 months). It seems to be total consensus that crude spreads will re-widen over the coming year (our original February '12 ‘Future of US oil' argument now makes us nervous to be caught by the pack).”

Valero Energy closed on Tuesday at $35.33.