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In recent weeks, Marathon Petroleum has benefited from strong sector momentum, as peer Valero Energy reached a new 52-week high and reported a series of positive earnings surprises, while Marathon itself holds a favorable analyst rating reflecting robust recent earnings performance. This sector-wide earnings strength and analyst optimism suggest that refining and marketing fundamentals are currently supportive for key players like Marathon Petroleum, potentially reinforcing confidence in its existing business profile and capital allocation approach. Next, we’ll examine how this sector-wide earnings momentum and favorable analyst stance might influence Marathon Petroleum’s existing investment narrative. Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 31 best rare earth metal stocks of the very few that mine this essential strategic resource. To own Marathon Petroleum, you need to believe its refining and marketing core can remain attractive even as long term fuel demand faces structural headwinds and decarbonization pressures build. The strongest short term catalyst is the current sector-wide earnings strength, reflected in Marathon’s recent results and favorable analyst rating, which this news reinforces rather than changes. The biggest risk remains that high recent utilization and profitability prove temporary if product demand or refining margins soften. The most relevant recent announcement here is Marathon’s Q2 2026 earnings, where revenue reached US$52,337 million and net income was US$5,138 million, both higher than a year earlier. That kind of earnings strength, combined with ongoing buybacks and a US$1.00 quarterly dividend, underpins the current investment narrative that capital returns are being funded from robust operations, even as longer term questions around fossil fuel demand and high debt levels remain front of mind for many shareholders. Yet against this strong recent performance, investors should still be aware of how quickly refining margins and utilization could turn if... Read the full narrative on Marathon Petroleum (it's free!) Marathon Petroleum's narrative projects $137.9 billion revenue and $5.2 billion earnings by 2029. This implies revenues will decline by 3.6% per year and earnings will decrease by $3.3 billion from $8.5 billion today. Uncover how Marathon Petroleum's forecasts yield a $324.56 fair value, a 15% downside to its current price. The most pessimistic analysts were already assuming Marathon’s revenue could fall about 3 percent a year and earnings sit near US$6.5 billion by 2029, so this latest sector strength might eventually push their cautious view on refining margins and midstream returns to evolve in a very different direction from the more optimistic narrative you have just seen. Explore 3 other fair value estimates on Marathon Petroleum - why the stock might be worth as much as $361.74! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Marathon Petroleum research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision. Our free Marathon Petroleum research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Marathon Petroleum's overall financial health at a glance. Opportunities like this don't last. These are today's most promising picks. Check them out now: Find 50 companies with promising cash flow potential yet trading below their fair value. Invest in the nuclear renaissance through our list of 91 elite nuclear energy infrastructure plays powering the global AI revolution. The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 19 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include MPC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

In the second quarter of 2026, Valero Energy reported a large improvement in adjusted earnings per share and revenues, alongside rising consensus estimates and a top Zacks Rank #1 rating reflecting upgraded earnings expectations. The company’s constructive refining backdrop, marked by lower light-product inventories and constrained global refining capacity, is supporting expectations for stronger crack spreads and profitability, reinforced by a low PEG ratio relative to its industry and a Growth Score of A. Next, we will examine how this stronger earnings performance and favorable refining backdrop may influence Valero’s existing investment narrative. The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 18 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. To own Valero today, you have to believe its refining network can keep converting a tight product market and complex Gulf Coast assets into healthy earnings, while managing regulatory and cost pressures in both traditional and low carbon fuels. The latest Q2 2026 results, with sharply higher earnings and revenues plus a top Zacks Rank #1, support the near term earnings catalyst, but do not eliminate key risks around policy shifts and potential asset impairments. Among recent announcements, the Board’s decision on 16 July 2026 to lift the equity buyback authorization to US$15,000 million is especially relevant here. Against stronger earnings and a constructive refining backdrop, this larger repurchase capacity may amplify the impact of higher profitability on per share metrics, but it also raises the stakes if refining margins or regulatory conditions turn less favorable than current expectations. Yet even with robust recent results, investors should be aware that policy and regulatory shifts around renewables could still... Read the full narrative on Valero Energy (it's free!) Valero Energy's narrative projects $112.7 billion revenue and $4.7 billion earnings by 2029. This implies a 1.5% yearly revenue decline and a $0.5 billion earnings increase from $4.2 billion today. Uncover how Valero Energy's forecasts yield a $267.83 fair value, a 24% downside to its current price. Some of the lowest analysts were assuming revenue could fall to about US$86.9 billion and earnings to roughly US$2.7 billion, a far more pessimistic view than the current results suggest, especially if heavy reliance on favorable crude discounts proves less durable than hoped. Explore 4 other fair value estimates on Valero Energy - why the stock might be worth 24% less than the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Valero Energy research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision. Our free Valero Energy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Valero Energy's overall financial health at a glance. Every day counts. These free picks are already gaining attention. See them before the crowd does: The latest GPUs need a type of rare earth metal called Dysprosium and there are only 30 companies in the world exploring or producing it. Find the list for free. The future of work is here. Discover the 38 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. Uncover the next big thing with 22 elite penny stocks that balance risk and reward. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include VLO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Management's own scorecard still leads with dollars, but the return measure that used to sit beside it was absent again, and that changes what a holder is actually betting on. ExxonMobil (XOM) has returned 46% over the past year against roughly 20.5% for the S&P 500, and it earned $14.5 billion in the second quarter of 2026. Set what management foregrounds now beside what it led with two years ago, and one measure has slipped out of the lead: what its capital actually earns. The Latest Results Leave Out The 13% Return on Capital Reporting on 2024, management led with full-year earnings of $34 billion and cited a return measure alongside them: "return on capital employed of 13%." What it foregrounds in the second quarter of 2026 is levels and running totals instead: $14.5 billion of earnings and $16.3 billion of cumulative structural cost savings since 2019. Neither says what the capital base earns. That savings program's latest step came in July 2026, when upstream operations were folded into one global operations organization of roughly 31,000 employees. A Fifth Vessel In Guyana And A Record In The Permian Much of the cash behind those totals goes back into a capital base that keeps growing: cash capital expenditures ran roughly $7 billion in the second quarter of 2026. The Guyana venture has recovered the $55 billion it invested there, nearly two years earlier than anticipated, and its fifth production vessel, Errea Wittu, sailed in June 2026 and, management said in July, remained on track for start-up by the end of 2026. Permian volumes set a record above 1.8 million oil-equivalent barrels a day, produced from acreage that supports extended reach laterals. Over the same three months, more than $9 billion went back to shareholders through dividends and share repurchases, and net debt fell by more than $7 billion. A balance sheet that strengthens through an investment phase this heavy is the kind of property the Trefis High Quality Portfolio favors. Revenue Accelerated To 9.6% While The Margin Slipped That growing base is why the missing ratio matters. Revenue over the past twelve months is about $361 billion, up 9.6% year over year against a three-year average growth rate of 0.0%. Profitability went the other way: the trailing operating margin is 10.7% against a three-year average of 11.7%. Management called the quarter exceptional despite a Middle East disruption that temporarily cost roughly 10% of upstream production; that same disruption also pushed chemical product margins up about 180% from the first quarter of 2026. The trailing year, which still absorbs that one exceptional quarter, is closer to the run rate than Q2 alone; a return figure would tell a holder how close. Reassuring On Cash, Silent On Return None of this is evasion, and the quiet is not in itself a warning. Guyana's cost recovery genuinely converts entitlement volume into free cash flow, and management's stated focus is value rather than volume. But a holder who bought a compounding-returns story now owns a company reporting bigger dollar totals on a thinner trailing margin, and the measure that would settle it has left the front of the results. Watch whether the corporate plan update due at the end of 2026 puts a return-on-capital figure back beside that savings total. Meanwhile, the question worth asking is not how much cash the business threw off, but which companies actually earn a rising return on the capital they keep spending. Unanswered Questions Cost The Biggest Holders The Most When management leaves questions open, the uncertainty weighs heaviest on whoever owns the most of the stock. Concentration tends to arrive by accident rather than by decision. What your largest position would do to your net worth is exactly what the Trefis Wealth team computes, with the same rules-based systematic discipline that runs our High Quality Portfolio. Request a free vulnerability audit of your biggest positions.

Shares of Darling Ingredients Inc. DAR have gained 12.8% in the past week, putting the durability of the move in focus. The rally is backed by a sharp improvement in core ingredients profitability and much stronger renewable-fuel economics. Estimate revisions have also moved decisively higher. The question now is whether Darling can sustain those earnings drivers as capacity constraints, higher costs and a weaker momentum signal create offsets. Darling Ingredients Inc. price-consensus-eps-surprise-chart | Darling Ingredients Inc. Quote Core ingredients adjusted EBITDA climbed to $352.5 million in the second quarter of 2026 from $206.9 million a year earlier. Contract management, commercial optimization, price-risk management and operating efficiencies are helping Darling extract more earnings from its existing asset base. Management expects third-quarter core ingredients adjusted EBITDA of $325-$340 million. Excluding the second-quarter tariff recovery in Food, that outlook implies underlying earnings generally consistent with the elevated second-quarter level, supporting the case for a more durable core earnings base. Darling's share of Diamond Green Diesel adjusted EBITDA surged to $389.2 million from $42.6 million a year earlier. EBITDA per gallon sold rose to $2.23 from 34 cents, helped by higher Renewable Identification Number values, diesel prices, production tax credits and about $50.5 million of tariff recovery at the DGD entity level. Valero Energy Corporation VLO, Darling's partner in Diamond Green Diesel, also has direct exposure to the venture's renewable-diesel economics. Bunge Global SA BG is relevant on the feedstock side, with its renewable-fuels partnerships and oilseed processing network positioning it in the same policy-driven demand chain. The Zacks Consensus Estimate for 2026 earnings has risen 55.1% in the past four weeks and 53.6% over the past 12 weeks. That magnitude of upward revision gives the recent stock-price advance a clearer earnings foundation. Darling reported second-quarter earnings of $2.41 per share, compared with 8 cents a year earlier, and topped the consensus mark of $1.45. Continued estimate support will depend on core-margin execution and renewable-fuel economics holding up through the balance of the year. Feed raw material processed remained at 3.1 million metric tons in the second quarter, unchanged from both a year earlier and the first quarter. Darling is out of rendering capacity in Brazil, while faster U.S. poultry line speeds could put additional pressure on its processing network. Selling, general and administrative expenses rose to $151 million from $138.1 million a year earlier, while acquisition and integration costs increased to $13.2 million from $3.4 million. If commodity prices or DGD margins retreat, those costs could limit operating leverage and cash conversion. Image Source: Zacks Investment Research DAR's 12.8% weekly rally has a solid earnings foundation, but continuation is not assured. Stronger core earnings, favorable DGD economics and sharply higher estimates are constructive, while throughput constraints and a higher expense base leave less room for weaker pricing or renewable-fuel margins. DAR currently carries a Zacks Rank #1 (Strong Buy). It also has a VGM Score of A, Growth Score of A and Value Score of B, while its Momentum Score of D is the weaker signal. The favorable Rank and broader Style Score mix support the earnings case, but the Momentum Score argues for a measured view after the rapid weekly advance. You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Darling Ingredients Inc. (DAR) : Free Stock Analysis Report Valero Energy Corporation (VLO) : Free Stock Analysis Report Bunge Global SA (BG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The finalized 2026-2027 Renewable Volume Obligation gives Darling Ingredients Inc. DAR a supportive policy backdrop for Diamond Green Diesel ("DGD"). The mandate is intended to increase domestic feedstock demand and renewable-fuel production, conditions that have coincided with much stronger DGD economics. The question is whether that support can carry through 2027. Recent results were unusually strong, but DGD still depends on Renewable Identification Number values, diesel pricing, feedstock costs and other market inputs. Darling Ingredients Inc. price-consensus-eps-surprise-chart | Darling Ingredients Inc. Quote Darling's share of DGD adjusted EBITDA reached $389.2 million in the second quarter of 2026, up from $42.6 million a year earlier. Production increased to 355.9 million gallons, while EBITDA per gallon sold climbed to $2.23 from 34 cents. The improvement gives DGD a much larger role in Darling's earnings profile. Valero Energy Corporation VLO, Darling's 50/50 DGD partner, reports the venture within its Renewable Diesel segment and says DGD has about 1.2 billion gallons of annual production capacity. Management expects continued tightness in Renewable Identification Numbers (RINs) to remain supportive of renewable-fuel production and DGD margins. Higher RIN values, diesel prices and production tax credits all contributed to the second-quarter improvement. Darling also believes the current Renewable Volume Obligation is appropriately sized when production increases, imports, small-refinery exemptions and normal deficit carryforwards are considered. Still, the company has said RINs need to remain supportive to keep incentivizing production and fulfill the mandate. DGD is expected to produce about 335 million gallons in the third quarter. Management views margins through 2027 as attractive under the current mandate, so maintaining high utilization remains an important part of the earnings opportunity. Phillips 66 PSX offers another renewable-fuels reference point. Its Rodeo Renewable Energy Complex has capacity of about 800 million gallons per year, and the company's second-quarter 2026 Renewable Fuels results benefited partly from higher regulatory credit pricing and renewable-fuels production. The second quarter included about $50.5 million of favorable International Emergency Economic Powers Act tariff recovery at the DGD entity level. That benefit means the quarter should not be treated as a clean recurring run rate even though the underlying market environment improved substantially. DGD profitability also remains exposed to renewable-fuel pricing, feedstock costs and broader market conditions. A softer RIN market, weaker diesel values or higher feedstock costs could narrow margins even if the policy framework continues supporting industry production. Image Source: Zacks Investment Research Policy support strengthens the DGD earnings case, but sustaining the second-quarter pace will require more than the Renewable Volume Obligation. RIN support, diesel values and feedstock economics need to remain favorable, while the tariff recovery makes the latest quarter an imperfect benchmark for future profitability. DAR currently carries a Zacks Rank #1 (Strong Buy), along with a Growth Score of A, VGM Score of A and Value Score of B. Its Momentum Score of D is the weaker signal. The mix favors the earnings-growth and broader style case, but the momentum reading supports a measured view of near-term price timing. You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Darling Ingredients Inc. (DAR) : Free Stock Analysis Report Valero Energy Corporation (VLO) : Free Stock Analysis Report Phillips 66 (PSX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Darling Ingredients Inc. DAR has a stronger earnings profile entering the second half of 2026. Second-quarter earnings rose to $2.41 per share from 8 cents a year earlier, while the Zacks Consensus Estimate for 2026 earnings has increased 55.1% in the past four weeks. The investment case still requires balance. A discounted valuation, stronger core profitability and favorable renewable-fuel economics support the upside case, but higher costs, flat Feed throughput and rendering-capacity constraints raise the execution bar. DAR trades at 10.04X forward 12-month EPS, below the Zacks sub-industry's 15.03X and its own five-year median of 11.85X. The discount leaves room for revaluation if recent earnings improvement proves durable. Image Source: Zacks Investment Research The stock has already gained 117.3% in the past year, so valuation alone is not enough to remove risk. Continued upside would likely require core margins and renewable-fuel economics to remain supportive as investors reassess the sustainability of 2026 earnings. Core ingredients adjusted EBITDA reached $352.5 million in the second quarter, up from $206.9 million a year earlier. Contract management, commercial optimization, price-risk management and operating efficiency helped lift earnings from the existing asset base. Management expects core ingredients adjusted EBITDA of $325-$340 million in the third quarter. Excluding the second-quarter Food tariff recovery, that range implies underlying performance generally consistent with the elevated second-quarter level, which supports a more durable earnings case beyond one unusually strong period. Diamond Green Diesel ("DGD") produced 355.9 million gallons in the second quarter, while Darling's share of DGD adjusted EBITDA rose to $389.2 million from $42.6 million a year earlier. Management expects about 335 million gallons of third-quarter production and views margins through 2027 as attractive under the current renewable-fuel mandate. Valero Energy Corporation VLO is Darling's partner in DGD, giving it direct exposure to the same renewable-diesel venture. Bunge Global SA BG, meanwhile, is expanding its role in renewable-fuels feedstocks through supply agreements and oilseed-processing investments, making it relevant to the broader feedstock and policy backdrop supporting renewable fuels. Selling, general and administrative expenses increased to $151 million in the second quarter from $138.1 million a year earlier. Acquisition and integration costs also rose to $13.2 million from $3.4 million, creating more pressure if commodity prices or DGD margins weaken. Feed raw material processed remained at 3.1 million metric tons, unchanged from both the year-earlier quarter and the first quarter. Darling is out of rendering capacity in Brazil, while faster U.S. poultry line speeds could pressure its network, leaving future Feed growth more dependent on pricing, mix and execution. Image Source: Zacks Investment Research For investors weighing whether to buy, hold or wait, DAR's setup remains constructive but not one-sided. The valuation discount, core earnings improvement and DGD contribution support the case, while rising expenses and constrained throughput make continued execution important. DAR currently carries a Zacks Rank #1 (Strong Buy). It also has a Growth Score of A, VGM Score of A, and Value Score of B, which are favorable when paired with a top Zacks Rank. The Momentum Score of D is the weaker signal, suggesting the stock's current support is stronger on growth, value and blended characteristics than on near-term momentum. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Darling Ingredients Inc. (DAR) : Free Stock Analysis Report Valero Energy Corporation (VLO) : Free Stock Analysis Report Bunge Global SA (BG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Valero Energy (VLO) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving. The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this oil refiner, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- has this insight at its core. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. For Valero Energy, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The earnings estimate of $15.00 per share for the current quarter represents a change of +309.8% from the number reported a year ago. Over the last 30 days, four estimates have moved higher for Valero Energy compared to no negative revisions. As a result, the Zacks Consensus Estimate has increased 46.83%. For the full year, the earnings estimate of $40.62 per share represents a change of +282.9% from the year-ago number. There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, five estimates have moved up for Valero Energy versus no negative revisions. This has pushed the consensus estimate 24.59% higher. The promising estimate revisions have helped Valero Energy earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. Investors have been betting on Valero Energy because of its solid estimate revisions, as evident from the stock's 10.3% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Valero Energy Corporation (VLO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Marathon Petroleum Corporation MPC has emerged as one of the standout names in the refining space after reporting exceptionally strong second-quarter results. The stock has surged 50.9% following the earnings release as investors responded to stronger refining margins, excellent operational execution and robust shareholder returns. Image Source: Zacks Investment Research The rally, however, changes the investment equation. While MPC's latest results and earnings outlook remain encouraging, investors must consider whether the recent gains have already priced in much of the improvement. Let's explore MPC’s growth drivers, risks, valuation and prospects while comparing it with refining peers Valero Energy VLO and Phillips 66 PSX. MPC's second-quarter performance provides a strong fundamental reason behind the stock's recent rally. Net income attributable to MPC jumped to $5.1 billion, or $17.73 per share, from $1.2 billion, or $3.96, in the year-ago quarter. Adjusted EBITDA surged to $8.46 billion from $3.29 billion. MPC's Refining & Marketing (R&M) segment was the biggest contributor. R&M adjusted EBITDA climbed to $6.66 billion from $1.89 billion, while R&M margin increased to $36.33 per barrel from $17.58. This improvement reflected stronger crack spreads and MPC's ability to optimize its crude and product flows. Operational execution adds another positive. MPC achieved its lowest level of unplanned downtime in a decade and operated the Gulf Coast system at 100% utilization during the quarter. R&M margin capture exceeded $1 billion in the second quarter and reached 108% for the first half, highlighting the company's ability to outperform benchmark market conditions. The refining market itself also remains supportive. Management highlighted more than 9 million barrels per day of global planned and unplanned refining capacity downtime, around 4 million barrels per day above historical norms. U.S. gasoline inventories remain below the five-year range, while distillate inventories are at the bottom of that range. MPC expects an enhanced mid-cycle refining environment through year-end and into 2027. The company also benefits from the integrated logistics network, which provides access to economically advantaged crude and allows it to optimize feedstocks and product yields. Two high-return projects at Robinson and El Paso came online during the second quarter, with management targeting returns of 25% or higher. Capital allocation is another positive. MPC returned $2.8 billion to its shareholders during the second quarter and repurchased $2.5 billion of stock. It had $6.1 billion remaining under existing repurchase authorizations at the end of June, while MPLX's growth strategy is expected to support 12.5% annual distribution growth in 2026 and 2027. However, the bullish thesis has meaningful risks. Refining is inherently cyclical, and the exceptional second-quarter margins were helped by unusually tight product markets, geopolitical disruptions and refinery downtime. If capacity returns and crack spreads normalize, MPC's earnings could retreat from current elevated levels. Capital requirements also remain significant. MPC and MPLX invested $2.64 billion in the first half, while the latter increased its 2026 growth capital outlook by $500 million to $2.9 billion to accelerate Gulf Coast fractionation and export projects. MPC's valuation remains a key positive. The stock trades at approximately 8.82x earnings, below the sub-industry average of 9.19x. This suggests that its shares are not excessively valued despite the sharp improvement in profitability. Image Source: Zacks Investment ResearchThe earnings outlook is also strengthening. The consensus estimates for MPC's 2026 and 2027 earnings have increased 45.09% and 25.50%, respectively, over the past 60 days. The upward revisions indicate that analysts are becoming more confident in the company's earnings potential. Image Source: Zacks Investment Research Still, investors should be cautious about interpreting the low P/E in isolation. Refiners often trade at lower multiples when earnings are near cyclical peaks. MPC's valuation is attractive, but sustained upside will depend on whether refining margins remain healthy enough to support current earnings expectations. MPC's performance should also be viewed against its major refining peers. Valero Energy offers similarly strong exposure to refining and can benefit from tight refined-product markets. Phillips 66 has a somewhat more diversified business model, with exposure to refining, midstream and chemicals. MPC's competitive advantage comes from its large refining footprint, extensive logistics network, strong optimization capabilities and ownership interest in MPLX. VLO provides a more concentrated refining investment case, while PSX offers greater diversification. The three companies therefore provide investors with different ways to participate in the favorable refining environment. Image Source: Zacks Investment Research MPC has outperformed its sub-industry and peers, gaining 75.3% compared with 71.7% for Valero Energy, 44.5% for the Oil Refining & Marketing sub-industry and 45.6% for Phillips 66. MPC's six-month rally also demonstrates that investors are currently placing a premium on strong refining execution. Whether that outperformance continues will depend heavily on margins, product demand and the industry's capacity outlook. MPC’s strong second-quarter results highlight its solid operating performance, supported by higher refining margins, improved reliability and substantial shareholder returns. The outlook also remains constructive, with management expecting a favorable refining environment through the end of 2026 and into 2027. Improving earnings estimates and a valuation below the sub-industry average provide additional support for the investment case. At the same time, the stock’s 50.9% post-earnings rally has raised expectations. Refining earnings are cyclical, and margins could moderate if product markets loosen or additional capacity returns. The recent share-price gains also mean that some of the improved fundamentals may already be reflected in the stock. With a Zacks Rank #3 (Hold), MPC presents a balanced risk-reward profile at current levels. The company’s strong fundamentals and earnings momentum are encouraging, but the sharp rally and cyclical nature of refining warrant some caution. Existing shareholders may continue to monitor the stock, while prospective investors may prefer to wait for a more favorable entry point or further evidence that elevated refining margins can be sustained. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report Valero Energy Corporation (VLO) : Free Stock Analysis Report Phillips 66 (PSX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

In the second quarter and first half of 2026, Valero Energy reported sharply higher sales and net income year over year, while completing a large share repurchase program totaling 48,114,319 shares for about US$8.42 billion. This combination of strong earnings and substantial buybacks materially reshapes Valero’s capital structure and highlights management’s focus on returning cash to shareholders. Next, we’ll examine how Valero’s powerful earnings rebound and completed US$2.26 billion buyback tranche affect its broader investment narrative. AI is about to change healthcare. These 43 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early. To own Valero today, you need to believe its refining and renewable fuels platform can turn volatile margins into sustained cash generation, even as regulatory and cost pressures remain front of mind. The latest surge in earnings and completion of the US$8.42 billion buyback strengthens near term financial flexibility, but does not remove key risks around policy changes, especially RIN and California LCFS rules, which still look like the most important swing factor for profitability right now. The most relevant recent announcement alongside the buyback completion is Valero’s Q2 2026 earnings release, which showed sharp year over year growth in sales and net income. Those results reinforce the idea that when refining conditions are favorable, Valero’s existing asset base can produce substantial cash that supports dividends and repurchases, potentially offsetting some of the impact if future regulatory or cost headwinds pressure margins. Yet against this strong quarter, investors should be aware that tighter environmental rules on West Coast refining and renewable fuels could still... Read the full narrative on Valero Energy (it's free!) Valero Energy's narrative projects $112.7 billion revenue and $4.7 billion earnings by 2029. This implies a 1.5% yearly revenue decline but an earnings increase of about $0.5 billion from $4.2 billion today. Uncover how Valero Energy's forecasts yield a $267.83 fair value, a 19% downside to its current price. Before this news, the most optimistic analysts were assuming revenue could reach about US$133 billion and earnings around US$8.2 billion, a much more upbeat story than the baseline view that highlights risks from weaker crack spreads and heavy crude availability; today’s earnings and buyback update may push some of those expectations higher, or prompt you to question whether such aggressive targets still feel realistic. Explore 4 other fair value estimates on Valero Energy - why the stock might be worth as much as $322.61! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Valero Energy research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision. Our free Valero Energy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Valero Energy's overall financial health at a glance. Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters: The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 16 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. Rare earth metals are the new gold rush. Find out which 28 stocks are leading the charge. The future of work is here. Discover the 39 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include VLO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

HF Sinclair Corporation DINO enters the second half of 2026 with sharply stronger earnings, rising estimates and healthy cash generation. The question is whether that operating momentum is enough to offset a valuation that has moved closer to the top of its recent historical range. The current setup is favorable, but not without trade-offs. Refining conditions remain constructive, non-refining businesses are contributing more, and capital returns are solid. Still, cyclical exposure, planned maintenance and less valuation cushion deserve attention. The Zacks Consensus Estimate for 2026 earnings stands at $11.85 per share. The current fiscal-year estimate has increased 19.8% over the past four weeks, reflecting a meaningful upward shift in expectations. Second-quarter adjusted earnings came in at $5.31 per share, topping the consensus mark of $4.39 by 21%. Refining adjusted EBITDA reached $1.02 billion as adjusted refinery gross margin rose to $25.95 per produced barrel sold from $16.50 a year earlier. Renewables adjusted EBITDA reached $123 million in the second quarter, reversing a $2 million loss a year earlier. Higher renewable identification number prices, Producer’s Tax Credit benefits and increased volumes supported the improvement. Lubricants & Specialties added $207 million of adjusted EBITDA, up from $55 million. HF Sinclair also generated $1.51 billion of operating cash flow and ended June with $2.26 billion in cash, giving it flexibility for reinvestment, buybacks and dividends. DINO trades at 0.49X forward 12-month sales per share. That is above its five-year median of 0.32X and close to the five-year high of 0.55X, leaving less valuation cushion than investors had at lower points in the cycle. Image Source: Zacks Investment Research The supportive refining environment is not unique to DINO. Valero Energy Corporation VLO reported second-quarter 2026 refining operating income of $4.5 billion, reinforcing the strength of industry margins. Marathon Petroleum Corporation MPC reported $8.5 billion of adjusted EBITDA in the quarter, also reflecting a favorable downstream backdrop. Refining remains the largest earnings driver, so a recovery in global product supply or weaker transportation demand could pressure margins. Management also identified Chinese product exports as a potential swing factor for global refining balances. Near-term execution matters as well. HF Sinclair expects third-quarter refinery crude throughput of 590,000 to 620,000 barrels per day because of the El Dorado turnaround, while the Cheyenne renewable diesel facility also has planned maintenance. Renewable Fuel Standard obligations remain another source of earnings variability. The earnings outlook remains favorable for HF Sinclair in the near term. The Zacks Consensus Estimate calls for earnings of $5.13 per share for the third quarter of 2026, implying growth of 110.3%. The fourth-quarter consensus estimate of $2.28 per share represents a 90% increase from the year-ago period. For full-year 2026, the consensus estimate of $11.85 per share indicates 134.2% growth from $5.06 in 2025, reinforcing the sharp earnings recovery. However, the 2027 estimate stands at $8.77 per share, implying a 26% decline. That projected moderation underscores the cyclical risk in DINO’s earnings and adds context to whether the stock’s richer valuation is justified by its near-term operating strength. Image Source: Zacks Investment Research DINO currently carries a Zacks Rank #1 (Strong Buy), which reflects favorable earnings estimate revision trends. You can see the complete list of today’s Zacks Rank #1 stocks here. Combined with the improving earnings outlook, that rating supports a constructive near-term view, although the richer sales multiple argues against treating valuation as an obvious bargain. The stock has a Value Score of A, Growth Score of A and VGM Score of A, a favorable combination alongside a top Zacks Rank. Its Momentum Score of C is less supportive, suggesting the strongest signals are coming from value, growth and estimate trends rather than momentum alone. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HF Sinclair Corporation (DINO) : Free Stock Analysis Report Valero Energy Corporation (VLO) : Free Stock Analysis Report Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research