Overview#

Goldman Sachs has identified three U.S. oil refining companies as its top picks, citing their strong earnings outlooks and attractive returns for shareholders. The firm believes these companies are well-positioned to benefit from recent geopolitical events affecting oil supply.

HF Sinclair#

HF Sinclair remains a favored choice for Goldman Sachs, despite recent changes in management that have impacted its stock price. The firm considers the shares to be undervalued and expects the company to gain from improving conditions on the West Coast. HF Sinclair also generates income from its Lubricants, Midstream, and Marketing segments. Recently, the company announced a $55 million project at its El Dorado facility aimed at enhancing reliability and increasing heavy crude processing. This project is projected to add $25 million to $30 million in annual earnings before interest, taxes, depreciation, and amortization (EBITDA). Additionally, HF Sinclair has potential exemptions related to renewable fuel credits, which could further benefit its financial performance.

Valero Energy#

Valero Energy is praised for its high-quality assets and advantageous location on the Gulf Coast. Goldman Sachs highlights Valero's capability to process Venezuelan crude oil, which it has done in the past. The company has also expanded its capacity for heavy and acidic crude through upgrades at its Port Arthur facility. Goldman Sachs anticipates significant returns for shareholders, projecting around $4.9 billion in 2026 and $5.2 billion in 2027, which would yield returns of 7% and 8%, respectively. Valero recently reported earnings of $3.82 per share on revenue of $30.37 billion, exceeding expectations for the fourth quarter of 2025.

Marathon Petroleum#

Marathon Petroleum has seen strong stock performance, but Goldman Sachs believes its potential in the West Coast market and jet fuel production is still undervalued. The firm appreciates Marathon's consistent and increasing cash payouts to shareholders, indicating a solid financial foundation. As the company continues to grow, it may offer additional value to investors.