Valero Energy (NYSE:VLO) shares fell more than 2% intra-day on Friday after Mizuho downgraded the refiner from Outperform to Neutral and set a price target of $192.

The analyst cited Valero's above-peer valuation and the potential for weaker refining margins as key reasons for the downgrade. While Mizuho reiterated its long-standing positive view of Valero's execution, integrated refining assets, and disciplined capital return strategy, it said the refining outlook for 2026 appeared less favorable.

The firm noted that several global refining projects originally expected to come online by 2025 had been delayed into the first half of 2026, potentially loosening supply-demand balances and pressuring refining cracks. Given Valero's strong year-to-date share performance—leading among large-cap refiners—and its significant exposure to the refining cycle, Mizuho said the stock could be disproportionately impacted by a softer macro environment.

Mizuho said the downgrade reflected a prudent pause rather than a change in the company's long-term fundamentals and adjusted the price target to $192 from $190.