Monday September 18, 12:33 pm Eastern Time
RESEARCH ALERT-Valero estimates, price target raised
NEW YORK, Sept 18 (Reuters) - PaineWebber said Monday analyst Chris Stavros raised his estimates of Valero Energy's (NYSE:VLO - news) 2000 and 2001 earnings and his price target for the stock to $38 from $35 following an analyst tour of the company's Benicia, Calif., refinery acquired from ExxonMobil (NYSE:XOM - news) in May.
-- Valero expects to generate a greater than expected benefit from Benicia this year in terms of earnings and cash flow, mainly as a result of very strong refinery margins on the West Coast. The refinery contributed 13 cents per share to second quarter profits with only a half quarter's worth of ownership, and was initially expected to add 32 cents per share during the second half.
-- ``Valero has now indicated that profits attributed to Benicia are expected to be more than double its initial estimate. In other words, more than $0.64 per share'' for the second half.
-- ``We are raising our full-year 2000 earnings estimates for Valero to $4.40 per share from $4.10, incorporating a $0.30 per share increase for (the third quarter) to $1.70.''
-- ``We are also raising our 2001 earnings forecast to $3.85 per share from $3.60, due to improving dynamics for West Coast refining and our belief that the U.S. refining cycle should remain quite healthy through (the first half).''
In Monday morning trading, Valero shares touched $33-1/2, the stock's best price since July 1999, before easing to $33, up 1/16 in mid-day trading. |
