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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.

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<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

<ul><li>4Q25 results beat consensus analyst forecasts. </li><li>Results reflected robust market demand coupled with Valero’s operational efficiency. </li><li>The strong performance was fueled by record refining and ethanol volumes and improved margins, with its oil refining margin up 62% Y/Y to $13.6 per barrel. </li></ul>

4Q25 results beat consensus analyst forecasts. Results reflected robust market demand coupled with Valero’s operational efficiency. The strong performance was fueled by record refining and ethanol volumes and improved margins, with its oil refining margin up 62% Y/Y to $13.6 per barrel. 

VLO: Beats Expectations Again in 4Q25; Ready to Hike Venezuelan Crude Throughput - 30 January 2026

<div><ul><li>Valero Energy Corporation (NYSE: VLO) is one of the world’s largest and most efficient producers of downstream oil products and low-carbon transport fuels. </li><li>Its diversified low-carbon fuels business offers multiple future pathways for growth and its low-cost oil refining operations lead the US refining industry on margins.</li><li>Valero’s 3Q25 results exceeded analyst expectations. Valero reported net income attributable to stockholders of $1.1 billion, or $3.53 per share.</li></ul></div>

Valero Energy Corporation (NYSE: VLO) is one of the world’s largest and most efficient producers of downstream oil products and low-carbon transport fuels. Its diversified low-carbon fuels business offers multiple future pathways for growth and its low-cost oil refining operations lead the US refining industry on margins.Valero’s 3Q25 results exceeded analyst expectations. Valero reported net income attributable to stockholders of $1.1 billion, or $3.53 per share.

VLO: 3Q25 Results; All Business Segments Beat; Management Affirms Positive Outlook

<ul><li>Valero Energy Corporation (NYSE: VLO) is one of the world’s largest and most efficient producers of downstream oil products and low-carbon transport fuels and among the best-positioned refiners for the changing energy landscape.</li><li>Its diversified low-carbon fuels business offers multiple future pathways for growth and its low-cost oil refining operations lead the North American refining industry on margins.</li><li>Operations include complex oil refining capacity of 3.2 million barrels per day in the US, Canada, and the UK, 1.2 billion gallons per year of renewable diesel (RD) and synthetic aviation fuel (SAF) capacity (joint venture [JV] with Darling Ingredients, Inc. [NYSE: DAR]), and corn ethanol capacity of 1.7 billion gallons per year in the Midwest. </li></ul>

Valero Energy Corporation (NYSE: VLO) is one of the world’s largest and most efficient producers of downstream oil products and low-carbon transport fuels and among the best-positioned refiners for the changing energy landscape.Its diversified low-carbon fuels business offers multiple future pathways for growth and its low-cost oil refining operations lead the North American refining industry on margins.Operations include complex oil refining capacity of 3.2 million barrels per day in the US, Canada, and the UK, 1.2 billion gallons per year of renewable diesel (RD) and synthetic aviation fuel (SAF) capacity (joint venture [JV] with Darling Ingredients, Inc. [NYSE: DAR]), and corn ethanol capacity of 1.7 billion gallons per year in the Midwest. 

Valero Energy Corporation VLO: Margins Improving on All Fronts

<div><ul><li>We are initiating coverage of Darling Ingredients, Inc. (NYSE: DAR), which is a global leader in sustainable solutions. </li><li>The company’s business model is rooted in the circular economy, transforming animal by-products, used cooking oil (UCO), and other waste streams into valuable ingredients for animal and human nutrition, and renewable fuel. </li><li>The company’s Diamond Green Diesel (DGD) joint venture (JV) with Valero Energy Corporation (VLO) is the largest renewable diesel (RD) producer in the US, with 1.2 billion gallons of combined RD and sustainable aviation fuel (SAF) capacity.</li></ul></div>

We are initiating coverage of Darling Ingredients, Inc. (NYSE: DAR), which is a global leader in sustainable solutions. The company’s business model is rooted in the circular economy, transforming animal by-products, used cooking oil (UCO), and other waste streams into valuable ingredients for animal and human nutrition, and renewable fuel. The company’s Diamond Green Diesel (DGD) joint venture (JV) with Valero Energy Corporation (VLO) is the largest renewable diesel (RD) producer in the US, with 1.2 billion gallons of combined RD and sustainable aviation fuel (SAF) capacity.

DAR: Leveraging "Sustainable Oil Field" For Feed and Food; Renewable Fuels-Led Recovery Ahead

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

VLO: Beats Expectations Again in 4Q25; Ready to Hike Venezuelan Crude Throughput - 30 January 2026

4Q25 results beat consensus analyst forecasts. Results reflected robust market demand coupled with Valero’s operational efficiency.

Water Tower Research

VLO: 3Q25 Results; All Business Segments Beat; Management Affirms Positive Outlook

Valero Energy Corporation (NYSE: VLO) is one of the world’s largest and most efficient producers of downstream oil products and low-carbon...

Water Tower Research

Valero Energy Corporation VLO: Margins Improving on All Fronts

We are initiating coverage of Valero, with an enhanced focus on the strategy and outlook for the low-carbon fuels business

Water Tower Research

DAR: Leveraging "Sustainable Oil Field" For Feed and Food; Renewable Fuels-Led Recovery Ahead

We are initiating coverage of Darling Ingredients, Inc. (NYSE: DAR), which is a global leader in sustainable solutions. The company’s business...

Water Tower Research

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