Guidance and Visibility Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Guidance and Visibility

AAPL 270.82

-1.0%

3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: Brasco One	6/28/2011 11:32:59 AM
	Read Replies (1) of 208838

VLO gets a $33 Target by UBS: Buy Rating Fuelled by Distillate Demand ?? A play on global distillate demand recovery We believe VLO is the best name to own in our coverage universe to play a global diesel demand recovery. With 60% of its refining capacity located in the U.S. Gulf Coast region, VLO is well positioned to export refined product to faster-growing global markets. Its high complexity refineries also provide feedstock flexibility and the ability to play global crude dynamics including the light-heavy differential. Furthermore, growing leverage to Eagle Shale crudes should provide attractive feedstock discounts in 2011 and 2012. ?? Major capital investments are a show me story VLO has taken significant steps towards improving the competitiveness of its portfolio. Underperforming assets have been idled, sold, or designated for material upgrade. The next page in VLO’s playbook involves the execution of ongoing strategic growth projects designed to grow EBITDA by $1.2 billion. While we agree with management’s long-term strategy to survive what could be a challenging long-term macro ahead for refiners, we admit it is a show me story. ?? Balance sheet strength to weather challenges ahead VLO boasts $4.1 billion of cash on its balance sheet ($7.21 per share) and a reasonable debt position (net-debt to cap of 15%), making it one of the best capitalized refiners in our universe. ?? Valuation: Initiating with Buy rating VLO trades at an attractive 2.5x 2012E EBITDA (0.7x P/B), below peers’ 3.3x EBITDA and 1.2x P/B. Our $33 price target reflects a sum of the parts analysis.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next