• In late June 2025, Valero Energy Corporation was removed from the Russell Top 200 and Value indices and added to the Russell Midcap and Value benchmarks as part of the index's annual reconstitution.
• This reclassification signals a shift in how the market positions Valero, with passive investment funds likely adjusting their portfolios in response to the index changes.
• We’ll explore how Valero’s transition from large-cap to mid-cap indices could influence its investment narrative and analyst expectations.

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Valero Energy Investment Narrative Recap

To be a shareholder in Valero Energy right now, you need to believe in its ability to generate consistent returns from its core refining operations and manage evolving risks in renewable fuels. The recent shift from large-cap to mid-cap indices is unlikely to affect the most immediate catalyst, anticipated strengthening in refining margins during peak demand, but it does little to reduce exposure to regulatory and operational cost challenges, particularly surrounding the West Coast assets.

The most relevant recent announcement is Valero’s ongoing commitment to shareholder returns, with the regular quarterly cash dividend of US$1.13 per share declared in May 2025. While this supports the earnings and capital discipline narrative, it does not materially alter the risks tied to asset impairments or regulatory shifts that investors are monitoring as potential challenges to near-term profitability.

But on the other side, investors should be alert to how renewed cost pressures on West Coast operations could...

Read the full narrative on Valero Energy (it's free!)

Valero Energy's outlook anticipates $122.9 billion in revenue and $4.5 billion in earnings by 2028. This implies a slight annual revenue decline of 0.1% and a substantial $3.6 billion increase in earnings from the current $924.0 million.

Uncover how Valero Energy's forecasts yield a $141.13 fair value, a 9% downside to its current price.

Exploring Other Perspectives

Individual fair value estimates from four Simply Wall St Community members range from US$120 to US$526, spanning nearly fivefold. While many believe in the prospect of rebound earnings growth, regulatory and policy risks for Valero remain a point of debate, explore their wide-ranging views now.

Explore 4 other fair value estimates on Valero Energy - why the stock might be worth 22% less than the current price!

Build Your Own Valero Energy Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Valero Energy research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Valero Energy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Valero Energy's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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