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Valero Energy Corp. – Petroleum Refineries
Valero Energy Corporation, through its subsidiaries (collectively, "Valero"), is an international manufacturer and marketer of transportation fuels and petrochemical products. Valero is a Fortune 50 company based in San Antonio, Texas, and it operates 15 petroleum refineries with a combined throughput capacity of approximately 3.2 million barrels per day and 13 ethanol plants with a combined production capacity of approximately 1.68 billion gallons per year. The petroleum refineries are located in the United States (U.S.), Canada and the United Kingdom (U.K.), and the ethanol plants are located in the Mid-Continent region of the U.S. Valero is also a joint venture partner in Diamond Green Diesel, which owns and operates a renewable diesel plant in Norco, Louisiana. Diamond Green Diesel is North America's largest biomass-based diesel plant. Valero sells its products in the wholesale rack or bulk markets in the U.S., Canada, the U.K., Ireland and Latin America. Approximately 7,000 outlets carry Valero's brand names.
Analysis Results
Intrinsic Value $204.17
Latest Price $113.82
Relative Value 44% undervalued
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Cash Flow (Billions)
Analysis Parameters
New Ticker
Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 1.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.7%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 1.9%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 3.68 3.45
2024 3.75 3.3
2025 3.82 3.15
2026 3.9 3.0
2027 3.97 2.87
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 85.8 billion. This corresponds to a present value of 58.0 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 15.8 billion. Adding in the terminal value gives a total present value of 73.8 billion.

There are presently 362.0 million outstanding shares, so the intrinsic value per share is 204.17.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 24,133,000,000
Current Cash 4,862,000,000
Current Liabilities 17,461,000,000
Current Debt 1,109,000,000
Non-Cash Working Capital (NCWC) 2,919,000,000
Change in NCWC 1,463,000,000
EBIT 15,751,000,000
Tax Provision 3,428,000,000
Depreciation and Amortization 2,473,000,000
Capital Expenditure -1,681,000,000
Unlevered Free Cash Flow 14,478,566,276
Current Assets 21,165,000,000
Current Cash 4,122,000,000
Current Liabilities 16,851,000,000
Current Debt 1,264,000,000
Non-Cash Working Capital (NCWC) 1,456,000,000
Change in NCWC -2,515,000,000
EBIT 2,130,000,000
Tax Provision 255,000,000
Depreciation and Amortization 2,405,000,000
Capital Expenditure -1,665,000,000
Unlevered Free Cash Flow 2,990,926
Current Assets 15,844,000,000
Current Cash 3,313,000,000
Current Liabilities 9,283,000,000
Current Debt 723,000,000
Non-Cash Working Capital (NCWC) 3,971,000,000
Change in NCWC 251,000,000
EBIT -1,579,000,000
Tax Provision -903,000,000
Depreciation and Amortization 2,351,000,000
Capital Expenditure -1,788,000,000
Unlevered Free Cash Flow -765,000,000
Current Assets 18,969,000,000
Current Cash 2,583,000,000
Current Liabilities 13,160,000,000
Current Debt 494,000,000
Non-Cash Working Capital (NCWC) 3,720,000,000
Change in NCWC -487,000,000
EBIT 3,836,000,000
Tax Provision 702,000,000
Depreciation and Amortization 2,255,000,000
Capital Expenditure -1,994,000,000
Unlevered Free Cash Flow 2,837,518,072
Current Assets 17,675,000,000
Current Cash 2,982,000,000
Current Liabilities 10,724,000,000
Current Debt 238,000,000
Non-Cash Working Capital (NCWC) 4,207,000,000
Change in NCWC 1,694,000,000
EBIT 4,572,000,000
Tax Provision 879,000,000
Depreciation and Amortization 2,069,000,000
Capital Expenditure -1,752,000,000
Unlevered Free Cash Flow 5,633,380,907
Current Assets 19,312,000,000
Current Cash 5,850,000,000
Current Liabilities 11,071,000,000
Current Debt 122,000,000
Non-Cash Working Capital (NCWC) 2,513,000,000
Change in NCWC -1,258,000,000
EBIT 3,599,000,000
Tax Provision -949,000,000
Depreciation and Amortization 1,986,000,000
Capital Expenditure -1,353,000,000
Unlevered Free Cash Flow 2,974,000,000
Current Assets 16,800,000,000
Current Cash 4,816,000,000
Current Liabilities 8,328,000,000
Current Debt 115,000,000
Non-Cash Working Capital (NCWC) 3,771,000,000
Change in NCWC 146,000,000
EBIT 2,881,000,000
Tax Provision 765,000,000
Depreciation and Amortization 1,894,000,000
Capital Expenditure -1,278,000,000
Unlevered Free Cash Flow 2,950,364,864
Current Assets 14,972,000,000
Current Cash 4,114,000,000
Current Liabilities 7,360,000,000
Current Debt 127,000,000
Non-Cash Working Capital (NCWC) 3,625,000,000
Change in NCWC 74,000,000
EBIT 7,148,000,000
Tax Provision 1,870,000,000
Depreciation and Amortization 1,842,000,000
Capital Expenditure -1,618,000,000
Unlevered Free Cash Flow 5,207,386,702
Current Assets 16,614,000,000
Current Cash 3,689,000,000
Current Liabilities 9,980,000,000
Current Debt 606,000,000
Non-Cash Working Capital (NCWC) 3,551,000,000
Change in NCWC 1,386,000,000
EBIT 5,902,000,000
Tax Provision 1,777,000,000
Depreciation and Amortization 1,690,000,000
Capital Expenditure -2,153,000,000
Unlevered Free Cash Flow 4,935,977,305
Current Assets 19,277,000,000
Current Cash 4,292,000,000
Current Liabilities 13,123,000,000
Current Debt 303,000,000
Non-Cash Working Capital (NCWC) 2,165,000,000
Change in NCWC -1,229,000,000
EBIT 3,963,000,000
Tax Provision 1,254,000,000
Depreciation and Amortization 1,720,000,000
Capital Expenditure -2,121,000,000
Unlevered Free Cash Flow 1,084,983,425
Current Assets 16,460,000,000
Current Cash 1,723,000,000
Current Liabilities 11,929,000,000
Current Debt 586,000,000
Non-Cash Working Capital (NCWC) 3,394,000,000
Change in NCWC 145,000,000
EBIT 5,024,000,000
Tax Provision 1,626,000,000
Depreciation and Amortization 1,574,000,000
Capital Expenditure -2,931,000,000
Unlevered Free Cash Flow 1,607,730,167

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