For Immediate Release
Chicago, IL – July 30, 2026 – Today, Zacks Equity Research discusses Delek US Holdings DK, PBF Energy PBF and Valero Energy VLO.
Industry: Oil Refining & Marketing
Link: https://www.zacks.com/commentary/2962978/3-top-refining-marketing-stocks-riding-industry-strength
The Zacks Oil and Gas - Refining & Marketing industry is benefiting from tight fuel supplies, steady transportation demand and improving earnings expectations. Refiners with flexible operations, diverse crude access and strong logistics networks are well positioned to capture favorable margins as global trade flows shift. Investments in renewable diesel, sustainable aviation fuel and efficiency projects also provide additional growth avenues.
Regulatory costs, maintenance spending and commodity-price volatility remain risks, but the overall outlook is encouraging. The industry ranks in the top 8% of Zacks industries and trades at an attractive valuation. Against this favorable backdrop, Delek US Holdings, PBF Energy and Valero Energy appear well positioned to capitalize on the industry's supportive trends.
Industry Overview
The Zacks Oil and Gas - Refining & Marketing industry consists of companies involved in selling refined petroleum products (including heating oil, gasoline, jet fuel, residual oil, etc.) and a plethora of non-energy materials (like asphalt, road salt, clay and gypsum). Some companies operate refined product terminals, storage facilities and transportation services.
The primary activity of these firms involves buying crude/other feedstocks and processing them into a wide variety of refined products. Refining margins are extremely volatile and generally reflect the state of petroleum product inventories, demand for refined products, imports, regional differences and capacity utilization in the industry. Other major determinants of refining and marketing profitability are the light/heavy and sweet/sour spreads. Oil and gas refiners are also prone to unplanned outages.
3 Trends Defining the Oil and Gas - Refining & Marketing Industry's Future
Tight Fuel Supply: Global refining capacity has remained tight, while fuel inventories in several markets are below normal levels. At the same time, demand for transportation fuels has stayed resilient despite market volatility. When supply struggles to keep pace with consumption, refiners often benefit from stronger margins on gasoline, diesel and jet fuel. Export demand can also rise as regions with limited refining capacity depend on imported products. If these conditions continue, refining and marketing companies should enjoy a supportive pricing environment and improved cash generation.
Flexible Refineries: Oil markets are becoming more unpredictable due to geopolitical events and changing trade flows. This increases the value of refineries that can process different grades of crude oil and quickly adjust their product mix based on market demand. Facilities with strong logistics networks and access to multiple crude sources are generally better equipped to manage supply disruptions and capture higher-value opportunities. As global energy markets remain dynamic, operational flexibility is becoming a more important competitive advantage for the refining and marketing industry.
Cleaner Fuels Create New Growth Opportunities: The refining industry is evolving beyond traditional fuels. Demand for renewable diesel, sustainable aviation fuel and other lower-carbon products is encouraging refiners to upgrade existing facilities instead of building entirely new ones. Many companies are also investing in projects that improve efficiency, reduce emissions and expand access to emerging fuel markets. This gradual shift allows refiners to serve both conventional and cleaner energy demand, creating additional revenue opportunities while helping the industry stay relevant as environmental regulations become stricter.
Rising Costs and Policy Risks: The refining business remains highly exposed to factors outside its control. Higher compliance costs, stricter environmental rules, inflation, expensive maintenance work and sudden regulatory changes can all squeeze margins. In addition, unexpected refinery outages or sharp swings in crude oil and fuel prices may disrupt operations and reduce profitability. If these challenges occur alongside weaker fuel demand or slower economic growth, refining and marketing companies could face pressure on earnings despite maintaining stable production levels.
Zacks Industry Rank Indicates Positive Outlook
The Zacks Oil and Gas - Refining & Marketing is a 16-stock group within the broader Zacks Oil - Energy sector. The industry currently carries a Zacks Industry Rank #19, which places it in the top 8% of 247 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates fairly strong near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of improving earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are becoming optimistic about this group’s earnings growth potential. As a matter of fact, the industry’s earnings estimates for 2026 have gone up 102.8% in the past year.
Considering the encouraging dynamics of the industry, we will present a few stocks that you may want to consider for your portfolio. But it’s worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Outperforms Sector & S&P 500
The Zacks Oil and Gas - Refining & Marketing industry has fared better than the broader Zacks Oil - Energy Sector as well as the Zacks S&P 500 composite over the past year.
The industry has gone up 60.9% over this period compared with the broader sector’s increase of 26.9%. Meanwhile, the S&P 500 has gained 18.7%.
Industry's Current Valuation
Since oil and gas companies are debt-laden, it makes sense to value them based on the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) ratio. This is because the valuation metric takes into account not just equity but also the level of debt. For capital-intensive companies, EV/EBITDA is a better valuation metric because it is not influenced by changing capital structures and ignores the effect of noncash expenses.
On the basis of the trailing 12-month enterprise value-to EBITDA (EV/EBITDA), the industry is currently trading at 6.25X, significantly lower than the S&P 500’s 18.24X. It is also below the sector’s trailing 12-month EV/EBITDA of 6.74X.
Over the past five years, the industry has traded as high as 6.42X and as low as 1.77X, with a median of 3.63X.
3 Stocks to Buy
Delek US Holdings: Delek US Holdings is a diversified downstream energy company with refining, logistics and marketing operations across the United States. Through its refining assets and Delek Logistics partnership, the Zacks Rank #1 (Strong Buy) company serves fuel markets while expanding third-party midstream services. Its strategy combines operational improvements, disciplined capital allocation and logistics integration to strengthen cash generation.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The company continues advancing its Enterprise Optimization Plan to improve margins, reduce costs and enhance free cash flow. It is also increasing the contribution from its midstream business while investing in refinery reliability, crude flexibility and higher-value product yields. Management remains focused on balanced capital allocation, operational execution and creating sustainable long-term shareholder value.
The Zacks Consensus Estimate for 2026 earnings of DK indicates 25.9% growth. It beat the Zacks Consensus Estimate for earnings in each of the last four quarters, with the average being 215.8%. The company’s shares have increased 174.3% in a year.
PBF Energy: PBF Energy is an independent petroleum refiner with operations spanning the East Coast, Mid-Continent, Gulf Coast and West Coast. Its refining network supplies transportation fuels to major regional markets, while investments in logistics and renewable fuels broaden its operating platform. The company also focuses on maintaining safe, reliable operations and improving the efficiency of its refining assets.
PBF continues to strengthen its portfolio through disciplined capital spending, refinery upgrades and operational improvement programs. Management remains focused on restoring full refining capabilities, enhancing asset reliability and maintaining a resilient balance sheet. The Zacks #1 Ranked company also expects renewable fuels, refining optimization and prudent capital allocation to support long-term value creation across different commodity price environments.
PBF Energy’s expected EPS growth rate for three to five years is currently 56%, which compares favorably with the industry's growth rate of 30.7%. The company beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other, the average being 113.3%. Shares of the company have gained 147.6% in a year.
Valero Energy: Valero Energy is one of the world's largest independent refiners, producing transportation fuels while also expanding its renewable diesel and ethanol businesses. Its integrated refining, wholesale and logistics network gives the company flexibility to optimize feedstocks, serve export markets and adapt to changing fuel demand. The Zacks Rank #2 (Buy) company also continues to invest in projects that improve efficiency, expand margins and lower carbon intensity.
Valero operates a high-complexity refining system supported by disciplined capital allocation and a strong balance sheet. Its focus remains on operational excellence, system-wide optimization and shareholder returns. Alongside traditional refining, Valero is growing its low-carbon fuels platform through renewable diesel, sustainable aviation fuel and ethanol projects, helping diversify earnings while strengthening its long-term competitive position.
Valero Energy has a market capitalization of more than $90 billion. VLO beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 28%. The Zacks Consensus Estimate for Valero’s 2026 earnings per share indicates 243.6% year-over-year growth. Shares of VLO have gained 114.4% in a year.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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