The independent analyst`s thesis summary on the company is as follows:The U.S. refining business has been a big winner in the energy space in 2012. In spite of this outperformance the refining space is trading at a forward multiple that implies the industry quickly reverts to the lower margin structure that has historically been the status quo. I believe, however, that the U.S. market has a medium-term structural advantage over the rest of the world which will allow certain refineries to earn a significant premium during that time. Valero is particularly attractive given that the stock earns a 17% FCF yield in 2013, and I think the market doesn`t understand the opportunity inherent in its LLS feedstock exposure.
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Source: Equity Brief via Thomson Reuters ONE