Is Valero Energy Corporation (VLO) overvalued?
On Equity Rank's model estimate, VLO trades close to its fair value (6% below it). Valero Energy Corporation (VLO) last closed at $346.45; the multi-method model fair value is $366.81.
| Price | Model fair value | Price vs model |
|---|---|---|
| $346.45 | $366.81 | 6% below |
What the answer rests on
- 8 of 13 valuation methods put VLO's value above its price and 5 put it below, so the methods disagree.
- To justify today's price, VLO's free cash flow would need to grow about 2.0% a year for ten years (a reverse discounted cash flow).
- VLO trades at 8.8 times its last year's earnings, against a median of 14.9 for 110 profitable Energy companies.
- Over the past year the price sat below the model fair value on 35% of trading days. The gap ranged from 10% below to 28% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind VLO's fair value · What prices assume · Other companies