Citi Has Buy On Valero (VLO)

Citi Investment Research has a Buy rating and a $29 price target on shares of Valero Energy Corporation VLO. In a note to clients, Citi says, "After the Paulsboro and Cameron Pipeline deals ($877 mm), VLO ended the year with $3.3 bn in cash. We believe a deal in Western Europe is on the table assuming VLO gets the right price. VLO stated that it would like to find a partner to invest in conversion units at the Aruba refinery. Total capex is estimated at $2.9 bn for 2011, with the hydrocracker projects at Port Arthur & St. Charles expected to be completed in 2012 (VLO has spent $1.2 bn and expects $1.4 bn more). We estimate these projects could generate $700 mm in EBITDA on an annualized basis. We reiterated our Buy rating and $29 target." Shares of VLO gained 98 cents yesterday to close at $25.30, a gain of 4%.