Research from Water Tower Research, Water Tower Research

Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

Equity Research Firm

Equity Bottom-Up

<div><ul><li>VLO posted a beat across every operating segment. 1Q26 operating income of $1.73B exceeded $1.40B FactSet consensus: Refining $1.83B (vs. $1.49B), Ethanol $90MM (vs. $50.5MM), Renewable Diesel $139MM (vs. $89.7MM).</li><li>Refining throughput of 2.94 Mbbl/d topped 2.84 Mbbl/d at $14.9/bbl gross margin (vs. $13.5/bbl). Net income was $1.3B, or $4.22 per share.</li><li>Results were up Y/Y from loss in 1Q25 as Hormuz dislocations and heavy sour discounts powered the Gulf Coast. </li></ul></div>

VLO posted a beat across every operating segment. 1Q26 operating income of $1.73B exceeded $1.40B FactSet consensus: Refining $1.83B (vs. $1.49B), Ethanol $90MM (vs. $50.5MM), Renewable Diesel $139MM (vs. $89.7MM).Refining throughput of 2.94 Mbbl/d topped 2.84 Mbbl/d at $14.9/bbl gross margin (vs. $13.5/bbl). Net income was $1.3B, or $4.22 per share.Results were up Y/Y from loss in 1Q25 as Hormuz dislocations and heavy sour discounts powered the Gulf Coast. 

VLO: 1Q26 Results; Sweeping Beat as Hormuz Tightens Markets and Heavy Sour Powers Margins

Thematic (Sector/Industry)

<div><ul><li>The liquid renewable fuels sector has entered 2H26 in the strongest position it has occupied in years. </li><li>Margins across renewable diesel (RD), biodiesel, sustainable aviation fuel (SAF), and low-carbon ethanol are running near multi-year highs, balance sheets are healthier, and carbon credit revenue is maturing into a durable earnings stream that stands apart from physical fuel.</li><li>In this report, we walk through the five most resounding themes from companies’ interim results and recent WTR events, illustrated with company-level evidence and near-term catalysts with our thoughts on what we’re watching in the coming weeks for investors to follow.</li></ul></div>

The liquid renewable fuels sector has entered 2H26 in the strongest position it has occupied in years. Margins across renewable diesel (RD), biodiesel, sustainable aviation fuel (SAF), and low-carbon ethanol are running near multi-year highs, balance sheets are healthier, and carbon credit revenue is maturing into a durable earnings stream that stands apart from physical fuel.In this report, we walk through the five most resounding themes from companies’ interim results and recent WTR events, illustrated with company-level evidence and near-term catalysts with our thoughts on what we’re watching in the coming weeks for investors to follow.

WTR Circular Carbon Focus Report : Five Key Themes Driving Liquid Renewable Fuels

Global Equities, Multi-Asset PM, Dantes Outlook

Damanick Dantes, CMT

Global Equities, Multi-Asset PM

Dantes Outlook

We invest over a full market cycle, using multi-asset portfolios tailored to each global client, from individuals to family offices.

Built to Endure

Cross Asset Strategy

<ul>
<li>Global equities and commodities contributed to gains throughout our portfolio suite, driven by positive selection effects.</li>
<li>Aggressive strategies continue to outperform their respective benchmarks YTD, especially as tech and crypto stabilize.</li>
<li>Positioning carries over into September, maintaining an underweight to bonds and overweights to global stocks and commodities.</li>
</ul>


Global equities and commodities contributed to gains throughout our portfolio suite, driven by positive selection effects.
Aggressive strategies continue to outperform their respective benchmarks YTD, especially as tech and crypto stabilize.
Positioning carries over into September, maintaining an underweight to bonds and overweights to global stocks and commodities.


Portfolio Update: Selective in Global Stocks, Commodities, Underweight Bonds

Smartkarma AI Primers, Smartkarma

αSK Primers

Smartkarma AI Primers

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<ul>
  <li>Valero is the world's largest independent petroleum refiner and a leading producer of renewable fuels, positioning it as a key player in both traditional and transitioning energy markets.</li>
  <li>The company's competitive advantage is rooted in its operational excellence, cost leadership, and strategic asset location, particularly its significant presence on the U.S. Gulf Coast which provides access to advantaged feedstocks and export markets.</li>
  <li>While demonstrating strong long-term performance and recent momentum, Valero faces risks from refining margin volatility, regulatory changes, and the long-term shift in energy consumption towards lower-carbon alternatives.</li>
</ul><p><em>This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.</em></p>


  Valero is the world's largest independent petroleum refiner and a leading producer of renewable fuels, positioning it as a key player in both traditional and transitioning energy markets.
  The company's competitive advantage is rooted in its operational excellence, cost leadership, and strategic asset location, particularly its significant presence on the U.S. Gulf Coast which provides access to advantaged feedstocks and export markets.
  While demonstrating strong long-term performance and recent momentum, Valero faces risks from refining margin volatility, regulatory changes, and the long-term shift in energy consumption towards lower-carbon alternatives.
This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Primer: Valero Energy (VLO US) - Apr 2026

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

<ul><li>An explosion occurred at a Valero Energy refinery in Port Arthur on the evening of Monday, March 23 (local time).</li><li>The Valero refinery is a large, complex facility located on the US Gulf Coast and is a net diesel exporter to Europe and Latin America.</li><li>We are positive in the short term on diesel and jet crack spreads, as global supply is expected to tighten.</li></ul>

An explosion occurred at a Valero Energy refinery in Port Arthur on the evening of Monday, March 23 (local time).The Valero refinery is a large, complex facility located on the US Gulf Coast and is a net diesel exporter to Europe and Latin America.We are positive in the short term on diesel and jet crack spreads, as global supply is expected to tighten.

Energy (Refinery): An Explosion Occurred At A Valero Refinery (400kbd Capacity) In Texas

United States

Valero Energy Corporation is an independent petroleum refining and marketing company that owns and operates refineries in the United States, Canada, and Aruba.  The Company produces conventional gasolines, distillates, jet fuel, asphalt, petrochemicals, lubricants, and other refined products as well as diesel fuel, low-sulfur and ultra-low-sulfur diesel fuel, and oxygenates.

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Valero Energy (VLO US)

VLO: 1Q26 Results; Sweeping Beat as Hormuz Tightens Markets and Heavy Sour Powers Margins

Refining throughput of 2.94 Mbbl/d topped 2.84 Mbbl/d at $14.9/bbl gross margin (vs. $13.5/bbl). Net income was $1.3B, or $4.22 per share.

Water Tower Research

WTR Circular Carbon Focus Report : Five Key Themes Driving Liquid Renewable Fuels

Margins across renewable diesel (RD), biodiesel, sustainable aviation fuel (SAF), and low-carbon ethanol are running near multi-year highs, balance...

Water Tower Research

Portfolio Update: Selective in Global Stocks, Commodities, Underweight Bonds

Breakdown of our global multi-asset portfolios with performance and positioning. We're overweight stocks and commodities and underweight bonds,...

Damanick Dantes, CMT

Primer: Valero Energy (VLO US) - Apr 2026

Valero is the world's largest independent petroleum refiner and a leading producer of renewable fuels, positioning it as a key player in both...

αSK Primers

Energy (Refinery): An Explosion Occurred At A Valero Refinery (400kbd Capacity) In Texas

The Valero refinery is a large, complex facility located on the US Gulf Coast and is a net diesel exporter to Europe and Latin America.

Krungthai XSpring

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