Highlights

  • Valero shows 819.48% one-year basic EPS growth, a P/E of 9.59 and PEG of -0.74.
  • Third quarter net income attributable to stockholders was $6,828 million, against $1,095 million.
  • Valero purchased 20,395,132 shares for $6.2 billion in nine months; $3.0 billion remains.
  • A March 23 fire shut down Port Arthur Refinery; lawsuits and proposed citations followed.

Valero Energy (NYSE:VLO) reported third quarter 2026 net income attributable to Valero stockholders of $6,828 million, and the undervalued growth stock figures read 819.48% one-year growth in basic earnings per share, a trailing twelve-month P/E of 9.59 and an expected-basis PEG of -0.74, with shares trading at USD 386.87 on October 28, 2026, down 0.12%. Alongside those figures, the refiner and renewable fuels producer issued $850 million of 5.150 percent Senior Notes in March, authorized a $5.0 billion share purchase program on July 16, and on October 27 authorized a further $10.0 billion program and declared a quarterly dividend of $1.20 per share.

Based in San Antonio, Texas, and incorporated in Delaware, Valero Energy operates three reportable segments. Refining runs petroleum refineries and markets gasolines, distillates and other products. Renewable Diesel is Diamond Green Diesel, a consolidated joint venture in which Valero holds 50 percent, selling renewable diesel, renewable naphtha and neat SAF. Ethanol operates ethanol plants and markets ethanol and distillers grains.

Growth: Third Quarter Earnings, Segments and Volumes

Net income attributable to Valero stockholders was $6,828 million in the third quarter against $1,095 million a year earlier, and $11,811 million for the nine months against $1,214 million. Basic earnings per share were $23.90 against $3.54, and diluted earnings per share were $23.89 against $3.53. Revenues were $46,098 million against $32,168 million, and operating income was $9,073 million against $1,509 million.

Refining operating income was $8,782 million against $1,610 million, which the company attributed primarily to higher gasoline and distillate margins, partly offset by lower throughput volumes. Throughput was 2,972 thousand barrels per day against 3,087 thousand. Renewable Diesel operating income was $353 million against a loss of $28 million. Ethanol operating income was $272 million against $183 million.

Valuation: P/E of 9.59, PEG of -0.74 and Cash Generation

The P/E ratio of 9.59 is measured on trailing twelve-month earnings, and the PEG ratio of -0.74 on an expected basis. Operations generated $13.9 billion of cash in the first nine months of 2026, and Valero stockholders' equity was $27,974 million at September 30, 2026.

On its third quarter call, the chief financial officer said shareholder cash returns produced a payout ratio of 52% for the quarter. The company keeps cash above the high end of its long-term $4 billion to $5 billion target, which the chief financial officer said preserves optionality.

Capital Returns, Cash and Liquidity

Valero purchased 20,395,132 shares for a total cost of $6.2 billion in the nine months, including 9,056,938 shares in the third quarter. Total return to stockholders was $7,257 million against $2,595 million. As of September 30, 2026, $3.0 billion remained under the July 2026 program, before the additional $10.0 billion authorized on October 27. The $1.20 dividend is payable December 21, 2026.

Cash and cash equivalents were $9,840 million and total liquidity was $14,739 million, with no borrowings under the $4,000 million Valero Revolver. Debt and finance lease obligations were $989 million current and $10,012 million noncurrent. The company repaid a $100 million debenture and a $426 million note that matured in 2026.

Disclosed Risks and Outlook for the Fourth Quarter

On March 23, 2026, a fire in a distillate hydrotreater unit shut down the Port Arthur Refinery, which resumed operations in April and returned to normal throughput in the second quarter. The company has received lawsuits, including a proposed class action alleging personal injury, property damage and nuisance, some seeking unspecified damages in excess of $1 million, and proposed citations and penalties from regulators that it intends to contest. It recorded an insurance recovery receivable of $99 million for the nine months, and said uncertainties remain over the ultimate outcomes. The company also stated that refining margins are sensitive to global supply and demand, feedstock costs and geopolitical developments, and that Benicia Refinery processing units were fully idled in April 2026.

The company said it expects 2026 capital investments attributable to Valero of approximately $2.0 billion, including an estimated $250 million for the Port Arthur incident. On the call, management reaffirmed that guidance and gave fourth quarter throughput ranges of 1.855 to 1.91 million barrels per day for the Gulf Coast and 440 thousand to 460 thousand for the Mid-Continent, with ethanol production of 4.9 million gallons per day, net interest expense of about $135 million and 2026 general and administrative expenses of about $1.1 billion.