UBS raised its price target on Valero Energy Corporation from $355 to $450 on September 8 while keeping a Buy rating on the shares, a revision that implies nearly 17% upside from current levels and sits above the stock's all-time high of over $393 reached earlier this month. The call rests on expectations that unusually strong global refining margins will persist longer than previously assumed, as damaged or idled refineries take time to return to full operations and Ukrainian attacks on Russian refineries further constrain worldwide capacity. Valero's COO, Gary Simmons, said an arbitrage opportunity for jet fuel exports to Europe has reopened, and the company expects jet fuel margins to improve over the remainder of the third quarter as refiners shift to winter diesel specifications. The refiner returned $2.6 billion to shareholders in its highest-ever second quarter, up sharply from $695 million a year earlier, and TD Cowen's Jason Gabelman expects Valero to repurchase about 20% of its market value between the third quarter and the end of next year. UBS's move signals confidence that elevated crack spreads can support further gains, though a pullback in refining margins remains the key risk to earnings expectations and the share price.
Valero Energy CorporationUBS raised its Valero price target to $450 and kept a Buy rating, implying ~17% upside.
UBS Group AGUBS is the analyst making the call, but the news is about Valero, not UBS's own business.
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