Valvoline faces challenges despite analyst optimism
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 09 2024
0mins
Should l Buy VVV?
Source: Coinmarketcap
Valvoline Inc's stock price fell by 3.01% and hit a 20-day low amid a generally positive market environment, with the Nasdaq-100 up 1.33% and the S&P 500 up 0.59%.
This decline occurs despite Roth Capital initiating coverage on Valvoline with a Buy rating and a price target of $42, indicating analyst optimism. However, the stock's performance suggests sector rotation as investors may be reallocating their portfolios in response to broader market trends.
The implications of this price movement highlight the challenges Valvoline faces in maintaining investor confidence, even with positive analyst ratings. The company's focus on winter vehicle maintenance, as indicated by their recent survey, may also play a role in shaping future performance.
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Analyst Views on VVV
Wall Street analysts forecast VVV stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for VVV is 38.31 USD with a low forecast of 30.00 USD and a high forecast of 44.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
9 Buy
4 Hold
0 Sell
Moderate Buy
Current: 36.760
Low
30.00
Averages
38.31
High
44.00
Current: 36.760
Low
30.00
Averages
38.31
High
44.00
About VVV
Valvoline Inc. provides automotive preventive maintenance services, convenient and trusted services in its retail stores throughout the United States and Canada. The Company's service includes 15-minute stay-in-your-car oil changes; battery, bulb and wiper replacements; tire rotations, and other manufacturer-recommended maintenance services. It has 2,300 franchised and Company-operated service centers across the United States and Canada. The vehicle maintenance services offered by the Company include air filter replacement, battery replacement, differential fluid, fuel system cleaning, headlight and taillight replacement, radiator service, tire rotation, transmission service, air conditioning, and wiper blade replacement. The Company’s services are offered to a range of vehicle types, serving both consumers and commercial customers, such as hybrid electric vehicles, battery electric vehicles, medium duty and passenger car motor oil light duty.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Valvoline Reports Strong Q1 2026 Earnings with Network Expansion
- Significant Sales Growth: Valvoline achieved net sales of $462 million in Q1 2026, reflecting an 11% year-over-year increase and a 15% rise when adjusted for refranchising impacts, indicating strong market demand and effective pricing strategies that further solidify its industry position.
- Margin Improvement: The gross margin rate increased to 37.4%, up 50 basis points year-over-year, primarily driven by labor and product cost leverage, demonstrating significant progress in cost control and operational efficiency.
- Acquisition Integration Progress: The Breeze acquisition added 162 stores, expected to contribute approximately $160 million in revenue and $31 million in EBITDA for fiscal 2026, and despite initial integration challenges, management remains optimistic about future growth prospects.
- Cash Flow Enhancement: Operating cash flows improved to $64.8 million, with free cash flow at $7.4 million, representing an approximately $20 million improvement compared to the prior year quarter, showcasing the company's positive financial health and capital management efforts.
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- Significant Revenue Growth: The company posted revenue of $462 million, an 11.6% year-over-year increase, exceeding market expectations by $0.98 million, showcasing Valvoline's robust sales and market demand.
- Store Sales Increase: System-wide store sales rose 13% to $924 million, with same-store sales growing 5.8%, reflecting sustained consumer demand and brand loyalty towards Valvoline products.
- Adjusted EBITDA Growth: Adjusted EBITDA reached $117 million, a 14% increase year-over-year, with adjusted EPS rising 16%, demonstrating the company's success in optimizing operations and cost control despite challenges from the FTC.
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- Historical Performance: Over the past two years, Valvoline has exceeded EPS estimates 63% of the time and revenue estimates 50% of the time, indicating a degree of reliability in its financial performance.
- Estimate Revisions: In the last three months, Valvoline has seen no upward revisions to its EPS estimates and seven downward revisions, while revenue estimates have experienced three upward and five downward revisions, suggesting a cautious market outlook on the company's future performance.
- Growth Targets: Valvoline aims for 20% sales growth and plans to add 330 to 360 new stores in fiscal 2026, which, following the completion of the Breeze acquisition, will enhance the company's competitive position in the market.
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Valvoline Raises Over $1.8M for Children's Hospitals, 40% Increase
- Fundraising Achievement: Valvoline Inc. and its franchisees raised over $1.8 million through Valvoline Instant Oil Change and Great Canadian Oil Change service centers, marking a nearly 40% increase from 2025, which underscores the company's ongoing commitment to community support and impact.
- Long-term Partnership: Since 2009, Valvoline Instant Oil Change has supported Children's Miracle Network Hospitals, contributing nearly $10 million to provide critical pediatric care and life-saving equipment, demonstrating the company's enduring commitment to children's health.
- Community Impact: This fundraising campaign is a cornerstone of Valvoline Inc.'s broader community impact initiative,
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- Cultural Relevance: The campaign integrates modern cultural trends by featuring college athletes Carnell Tate and Luke Montgomery as spokespeople, which is expected to increase brand appeal among younger consumers and drive customer conversion rates.
- Market Coverage: With over 2,300 service centers across the U.S. and Canada and completing more than 30 million services annually, Valvoline strengthens its leadership position in the quick automotive maintenance market through the 'Instant Transfer Portal'.
- Customer Choice: The campaign not only welcomes new customers but also encourages returning ones, reflecting Valvoline's commitment to customer choice and accessibility, which is expected to enhance customer loyalty and market share.
See More
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- Significant Sales Growth: Valvoline achieved net sales of $462 million in Q1 2026, reflecting an 11% year-over-year increase and a 15% rise when adjusted for refranchising impacts, indicating strong market demand and effective pricing strategies that further solidify its industry position.
- Margin Improvement: The gross margin rate increased to 37.4%, up 50 basis points year-over-year, primarily driven by labor and product cost leverage, demonstrating significant progress in cost control and operational efficiency.
- Acquisition Integration Progress: The Breeze acquisition added 162 stores, expected to contribute approximately $160 million in revenue and $31 million in EBITDA for fiscal 2026, and despite initial integration challenges, management remains optimistic about future growth prospects.
- Cash Flow Enhancement: Operating cash flows improved to $64.8 million, with free cash flow at $7.4 million, representing an approximately $20 million improvement compared to the prior year quarter, showcasing the company's positive financial health and capital management efforts.
See More
Valvoline Q1 Earnings Exceed Expectations
- Strong Earnings Performance: Valvoline reported a Q1 non-GAAP EPS of $0.37, beating expectations by $0.04, indicating ongoing improvements in profitability despite market challenges.
- Significant Revenue Growth: The company posted revenue of $462 million, an 11.6% year-over-year increase, exceeding market expectations by $0.98 million, showcasing Valvoline's robust sales and market demand.
- Store Sales Increase: System-wide store sales rose 13% to $924 million, with same-store sales growing 5.8%, reflecting sustained consumer demand and brand loyalty towards Valvoline products.
- Adjusted EBITDA Growth: Adjusted EBITDA reached $117 million, a 14% increase year-over-year, with adjusted EPS rising 16%, demonstrating the company's success in optimizing operations and cost control despite challenges from the FTC.
See More
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- Retail Stocks on Sale: Retail stocks are currently undervalued, presenting a potential opportunity for investors looking for bargains.
- Investment Opportunity: The decline in retail stock prices may attract bargain hunters seeking to capitalize on lower valuations.
See More
Valvoline Set to Announce Q1 Earnings on February 4th
- Earnings Announcement: Valvoline (VVV) is set to release its Q1 earnings report on February 4th before the market opens, with consensus EPS estimated at $0.33, reflecting a 3.1% year-over-year increase, and revenue expected to reach $461.02 million, up 11.4% year-over-year.
- Historical Performance: Over the past two years, Valvoline has exceeded EPS estimates 63% of the time and revenue estimates 50% of the time, indicating a degree of reliability in its financial performance.
- Estimate Revisions: In the last three months, Valvoline has seen no upward revisions to its EPS estimates and seven downward revisions, while revenue estimates have experienced three upward and five downward revisions, suggesting a cautious market outlook on the company's future performance.
- Growth Targets: Valvoline aims for 20% sales growth and plans to add 330 to 360 new stores in fiscal 2026, which, following the completion of the Breeze acquisition, will enhance the company's competitive position in the market.
See More
Valvoline Raises Over $1.8M for Children's Hospitals, 40% Increase
- Fundraising Achievement: Valvoline Inc. and its franchisees raised over $1.8 million through Valvoline Instant Oil Change and Great Canadian Oil Change service centers, marking a nearly 40% increase from 2025, which underscores the company's ongoing commitment to community support and impact.
- Long-term Partnership: Since 2009, Valvoline Instant Oil Change has supported Children's Miracle Network Hospitals, contributing nearly $10 million to provide critical pediatric care and life-saving equipment, demonstrating the company's enduring commitment to children's health.
- Community Impact: This fundraising campaign is a cornerstone of Valvoline Inc.'s broader community impact initiative,
See More
Valvoline Launches Instant Transfer Portal to Attract New Customers
- Marketing Innovation: Valvoline Inc.'s launch of the 'Instant Transfer Portal' aims to invite drivers to switch from their current oil change providers, leveraging a campaign inspired by the college sports transfer portal to enhance the brand's speed, convenience, and reliability.
- Cultural Relevance: The campaign integrates modern cultural trends by featuring college athletes Carnell Tate and Luke Montgomery as spokespeople, which is expected to increase brand appeal among younger consumers and drive customer conversion rates.
- Market Coverage: With over 2,300 service centers across the U.S. and Canada and completing more than 30 million services annually, Valvoline strengthens its leadership position in the quick automotive maintenance market through the 'Instant Transfer Portal'.
- Customer Choice: The campaign not only welcomes new customers but also encourages returning ones, reflecting Valvoline's commitment to customer choice and accessibility, which is expected to enhance customer loyalty and market share.
See More
