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The energy sector has recently been one of the most cautious areas of the stock market, since President Trump began to develop more trading tariffs in this and other sectors that depend on the price of oil and its fluctuations. The very last blow came to Venezuela, where the fine was a 25% tariff for all countries and companies that are engaged in Venezuelan oil. Although this may seem bear in general, this actually creates a huge opportunity.

This opportunity can be perceived only by those who know what they are looking for, and it is here that Venezuelan oil matters. Compared to the oil in the intermediate (WTI) Western Texas, which is mainly used for gasoline from its light and sweet nature, heavy and sour oil, emerging from Venezuela, makes it suitable for other types of products, such as diesel fuel. Narrow places formed in this heavy oil can increase profits and earnings for companies that are engaged in this space.

Companies such as Valero Energy Co. NYSE: VLO and Marathon Petroleum Co. NYSE: MPC Equipped to clarify heavy, acidic crude oil into diesel fuel. From there Cummins Inc. NYSE: CMI He enters the picture as a key player producing diesel engines and related machines.

Kammins won an impetus for speculation of tariffs for a trade tariff

As soon as the potential for trading tariffs began to hit the news tape around the markets, investors left a struggle to find out what consequences could be on various market industries. Nevertheless, some analysts on the Wall Schell have already connected points, moving forward on this issue.

As of February 2025, those of the Evercore decided to repeat their excellent rating for Cummins and increase their values ​​to $ 451 per share, which is significantly higher than their previous estimates of $ 408 per share. This is not only the initial voice of trust, but also the main sign of what can happen in the future.

Compared to where the shares are traded today, this assessment means not only that the shares need to make a new 52-week high price, but also that in the coming months there is a implied rally for as many as 37.5%. These views make sense, since the company can soon be subjected to a greater amount of breakthrough of demand for its diesel engines and cars, if tariffs ultimately create narrow places.

From this point of view, institutional buyers from UBS Asset Management decided to increase their shares in Cummins by 6.5% as of February 2025, providing their clean position to $ 566.9 million. USA today, or 1.2% of ownership in the company.

Why Valero Energy can see the growth of profit among shifts in the industry

Looking at Valero Energy rating indicators, investors may notice that the market can be evaluated in the wrong assumptions about the company’s future income.

With the current P/E ratio in 15.8x Valero, it is traded with a steep discount on the average value of the energy sector in 47.3x.

This discount could be justified by a couple of quarters ago, when the industry remained uncertain against prices and oil policy.

Nevertheless, the situation has become a little more clear, and these recent announcements of tariffs now show all the way forward regarding more severe Venezuelan oil.

Part of this belief may be why, during the last quarter, up to 2.6 billion dollars. The United States during the last quarter made its way to Valero Energy, repeating the thesis that a narrow place for these oil refineries can lead to better income in the future.

Marathon diesel diesel diesel diesel diesel is gaining momentum

Now that the Marathon Petroleum shares are traded 68% of their 52-week maxima, the ratio of risk and rewards becomes extremely favorable for those who want to invest in the history of the company. This story includes massive profit growth rates per share (EPS) in the next quarters.

Based on the forecasts of Wall Street analysts for EPS, marathon oil can report up to $ 2.74, which is significantly increased from today’s EPS by $ 0.77.

Given that shares are mainly due to the basic EPS, this forecast allows investors to connect a dissertation diesel current to this.

This point of view also explains why the Wells & Fargo analysts decided to maintain their sales ratings as of March 2025, along with an increase in the estimate of up to 185 dollars per share, to call to 23.5% up, from where the shares are being traded today.

All this confirms the ratio of risk to remuneration, as well as the bull thesis about diesel oil refineries and prices.

Before considering cummins, you will want to hear this.

Marketbeat monitors the highest and most effective analysts with the most effective Wall Street analysts and promotions that they recommend to their customers daily. Marketbeat has identified five shares that leading analysts quietly whisper to their clients to buy now before the wider market conquers … And Cummins was not on the list.

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