Cramer Recommends Selling Valero Energy Stock

Jim Cramer, the Mad Money host who ran his own hedge fund for 14 years before joining CNBC, is telling investors that Valero Energy’s (NYSE:VLO) remarkable two-year rally has run its course. On a recent CNBC segment, Cramer said the refiner’s "day has come and gone" and advised shareholders to take profits before the refining cycle turns.

The timing matters. Valero stock has nearly tripled since late 2024, powered by the strongest refining margins the industry has seen in a decade. Cramer’s view is that those conditions no longer justify the price investors are paying today.

What Valero actually does and why the stock went on such a wild run

Valero is the largest independent petroleum refiner in the United States, turning crude oil into gasoline, diesel, jet fuel, and feedstocks for petrochemical plants. Unlike integrated majors such as ExxonMobil (XOM) and Chevron (CVX), Valero does not drill its own oil. That makes the stock an almost pure play on refining margins known as crack spreads.

Crack spreads widened dramatically through 2025, and most of 2026, as global refining capacity stayed offline following outages and planned shutdowns. In the second quarter of 2026, Valero reported net income of $3.7 billion compared with $714 million a year earlier. The stock followed, closing out the first half of October above $460.

Why Cramer thinks the refining-cycle rally has peaked

Cramer’s "day has come and gone" framing echoes a position he first floated in May 2025, when he told a Mad Money caller that Valero had "already had too much of a run," and preferred Phillips 66 (PSX) among the refiners. His concern then and now is that the earnings power investors are capitalizing on was never meant to last through a full cycle.

Several Wall Street firms share that view. On October 26, 2026, Freedom Broker downgraded Valero from Hold to Sell, arguing that the current share price already assumes peak refining profitability will persist for years. Wolfe Research reached a similar conclusion in April 2026, flagging an 18% shortfall between consensus free-cash-flow estimates and its own base case.

Morningstar Chief US Market Strategist Dave Sekera called Valero a sell on The Morning Filter podcast earlier this month, telling listeners that refiners in general look overvalued at current prices.

What insider activity and analyst targets suggest about the next move

Insiders are also trimming exposure. Valero EVP and COO Gary Simmons disposed of 4,000 shares of common stock on September 16, 2026. Veteran CNBC Fast Money regular Steve Weiss, who has managed money for more than three decades, exited his full Valero position in September for similar reasons.

Analyst price targets have fallen behind the rally. Theresa Chen at Barclays (BCS) set a $279 target in July, Jason Gabelman at TD Cowen (TD) pegged $292 in June, and Doug Leggate of Wolfe Research holds a $203 target set in April. Those figures all remain well below where VLO has traded for most of October and November.

What ordinary investors should take away before adjusting their energy positions

For readers who bought Valero in the early days of the refining rally and watched their investment nearly triple, Cramer’s message is about when to take profits before the macro backdrop weakens. Trimming a position after a 184% year-to-date run is a tax-planning conversation worth having with an advisor before year-end.

If you’re thinking about a new position, the warning from Cramer, Morningstar (MORN), and Freedom Broker is more direct. Refining capacity is returning globally, crack spreads are normalizing, and the second-half earnings comparisons will likely be harder than the first-half gains, according to the Morningstar and Wolfe analyses.

The practical signal to watch is Valero’s refining operating income on its next quarterly report. That line hit $4.5 billion in the second quarter of 2026. If it falls meaningfully short on the next release, the thesis Cramer is pushing will have its clearest confirmation.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.