Deutsche Bank Sees Little Upside In Valero (VLO)

Deutsche Bank sees little upside in shares of Valero Energy Corporation VLO, even after it sold its Paulsboro refinery to PBF Energy Company for $360 million, plus working capital and inventories, estimated at $275 million. It has a Hold rating and a $17 price target. In the research note, Deutsche Bank writes, "Overall we think the more companies can shrink in marginal refining, the better, and see this as a positive for Valero. With continued growth in ethanol supply, weak gasoline margins, East Coast refineries subject to strong competition from excess global refined oil products sloshing around in the Atlantic Basin, we particularly disfavour East Coast refining. We see Valero as trading at fair value with Q3 expected to be weak and entrance to the weakest part of the year for refining. It is a long road to driving season 2011." Shares of Valero gained 6 cents to $16.88 yesterday, a gain of 0.36%.