» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
Skip Navigation LinksHome >
VOL. 124 | NO. 203 | Thursday, October 15, 2009

Valero Shares Fall as Analyst Downgrades Stock

The Associated Press

Print | Front Page | Email this story | Comments ()

NEW YORK (AP) - Shares of Valero Energy Corp. fell on Wednesday as an analyst downgraded the refiner's stock, citing a potential $1 billion asset write-down and a weak outlook for the industry.

Valero's stock dropped 53 cents, or 2.8 percent, to $18.65 in midday Wednesday trading.

Soleil Securities analyst Jacques Rousseau cut his rating for the stock to "Sell" from "Buy." He also cut his price target to $17, down from a previous target of $25.

Rousseau warned that later this month, the company could announce a write-off bigger than $1 billion related to the falling value of assets at three refineries. The company could also reduce its dividend, he added.

Rousseau cut his 2009 earnings estimate to a loss of 50 cents per share, compared with a loss 5 cents per share from an earlier estimate. Analysts polled by Thomson Reuters expect, on average, a loss of 35 cents per share.

Soleil Securities also reduced its refining margin forecasts through 2010 on expectations that 2010 will see only a marginal improvement in demand. Rousseau believes 2010 refining margins should be as low as 2009 levels.

Looking ahead, Rousseau said that potential climate law legislation could significantly cut away at refiner earnings and cash flow. Both the House bill and recently released Senate bill could require refiners to purchase carbon permits, potentially doubling operating costs. The debate on these issues should continue into mid-2010, he said, and will likely result in higher energy prices and reduced demand for refined products.

Valero has a refinery in Memphis.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Sign-Up For Our Free Email Edition
Get the news first with our daily email


 
Blog News, Training & Events
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 86 393 21,159
MORTGAGES 94 424 24,785
FORECLOSURE NOTICES 0 93 8,703
BUILDING PERMITS 173 1,010 43,347
BANKRUPTCIES 52 292 14,194
BUSINESS LICENSES 15 90 6,491
UTILITY CONNECTIONS 28 167 13,678
MARRIAGE LICENSES 12 89 5,158

Weekly Edition

Issues | About

The Memphis News: Business, politics, and the public interest.