Bank of America Merrill Lynch Has Buy On Valero Energy

Bank of America Merrill Lynch is out with a research report on Valero Energy Corp.

and it has a Buy rating and a $36 price target on shares. In a note to clients, Bank of America Merrill Lynch writes, "As the first of the independent refiners to report 2Q results, VLO set the stage with strong sequential and YoY results in refining; however, VLO did not reap the full benefit given unplanned downtime at several plants and higher taxes versus guidance. Adjusted EPS of $1.31 missed our estimate of $1.37 mainly on higher reported tax rate (38% vs. guidance of 35%) which accounted for $0.08 of the delta vs. our expectations. Expectations for 3Q11 are stout; but it is the combination of VLO's relative underperformance with strong organic earnings potential in 2011 that leaves it amongst our preferred names in the group." Shares of VLO lost 20 cents yesterday to close at $26.48.