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    VLO · NYQ · Energy

    Valero Energy Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 238.92

    Market price

    USD 381.46

    Implied upside

    -37.4%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.73% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.99% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 238.92-37.4%
    Exit multiple
    USD 303.21-20.5%
    Market price
    USD 381.46

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn4bn7bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 163.6bnUSD 143.7bnUSD 128.9bnUSD 118.0bnUSD 110.1bnUSD 104.8bnUSD 101.7bnUSD 100.5bnUSD 101.2bnUSD 103.7bn-4.9%
    EBITUSD 9.6bnUSD 8.5bnUSD 7.6bnUSD 6.9bnUSD 6.5bnUSD 6.2bnUSD 6.0bnUSD 5.9bnUSD 6.0bnUSD 6.1bn-4.9%
    NOPATUSD 7.6bnUSD 6.7bnUSD 6.0bnUSD 5.5bnUSD 5.1bnUSD 4.9bnUSD 4.7bnUSD 4.7bnUSD 4.7bnUSD 4.8bn-4.9%
    Add depreciation & amortisationUSD 3.3bnUSD 2.9bnUSD 2.6bnUSD 2.4bnUSD 2.2bnUSD 2.1bnUSD 2.0bnUSD 2.0bnUSD 2.0bnUSD 2.1bn-4.9%
    Less capital expenditureUSD -3.3bnUSD -3.0bnUSD -2.8bnUSD -2.6bnUSD -2.5bnUSD -2.5bnUSD -2.5bnUSD -2.5bnUSD -2.6bnUSD -2.8bn-1.8%
    Capex, % of revenue2.0%2.1%2.1%2.2%2.3%2.4%2.4%2.5%2.6%2.7%-
    Less increase in working capitalUSD -1.7bnUSD 828.2mUSD 618.0mUSD 455.9mUSD 327.2mUSD 221.4mUSD 130.7mUSD 49.2mUSD -28.1mUSD -105.5m-26.6%
    Free cashflow to firmUSD 5.9bnUSD 7.4bnUSD 6.4bnUSD 5.7bnUSD 5.1bnUSD 4.7bnUSD 4.4bnUSD 4.2bnUSD 4.1bnUSD 4.0bn-4.2%
    Discount factor0.96450.89720.83460.77630.72210.67170.62490.58130.54070.5030-
    Present valueUSD 5.7bnUSD 6.6bnUSD 5.4bnUSD 4.4bnUSD 3.7bnUSD 3.2bnUSD 2.7bnUSD 2.4bnUSD 2.2bnUSD 2.0bn-
    Present Value Of The ForecastUSD 38.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.700Reported 0.552, pulled toward 1.0 (Blume)
    Cost of equity7.85%Risk-free + beta x equity risk premium
    Cost of debt5.44%Risk-free + 55bp, the spread for a AA rating at 7.8x interest cover. Book interest / average debt was lower, at 4.8%.
    Market capitalisationUSD 106.4bn90.1% of capital
    Total debtUSD 11.7bn9.9% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.50%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 238.92

    53% of EV

    Forecast FCFF, final year
    USD 4.0bn
    Capex at depreciation, working capital in reinvestment
    USD 4.8bn
    Less reinvestment at g/ROIC (14.4% of NOPAT)
    USD -695.2m
    Capitalised
    USD 4.1bn
    ROIC (reported)
    17.3%
    Terminal value, undiscounted
    USD 84.5bn
    Terminal value, discounted
    USD 42.5bn
    Enterprise value
    USD 80.8bn
    Less net debt
    USD 7.0bn
    Equity value
    USD 73.8bn

    Exit at 15.2x EBITDA

    Value per shareUSD 303.21

    62% of EV

    Terminal value, undiscounted
    USD 124.0bn
    Terminal value, discounted
    USD 62.4bn
    Enterprise value
    USD 100.7bn
    Less net debt
    USD 7.0bn
    Equity value
    USD 93.7bn

    Spread between methods: 24%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.50%331.44354.17384.92428.50494.52
    6.50%267.97279.35293.90312.97338.81
    7.50%225.43231.45238.92248.33260.38
    8.50%194.85198.06201.99206.85212.91
    9.50%171.76173.38175.39177.87180.95

    Outlined: this model. Green text: above today's price of 381.46. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-11.4%-1.7%3.9%
    EBIT margin8.9%5.9%9.1%
    Discount rate-7.5%5.5%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.