Goldman Sachs assumes Buy rating on Valvoline stock amid market position

On Tuesday, Goldman Sachs analysts assumed coverage of Valvoline stock (NYSE: VVV) with a Buy rating, setting a price target of $45. Analysts at Goldman Sachs view Valvoline as a leading operator in a fragmented market that benefits from essential, needs-based demand. The company’s strong position is reflected in its perfect Piotroski Score of 9 and healthy revenue growth of 9.56% over the last twelve months. The firm believes the company’s position in the current macroeconomic environment is strong, with limited effects from tariffs.According to InvestingPro, there are 8 more key insights available about Valvoline’s financial health and growth prospects.

Goldman Sachs highlighted that Valvoline’s valuation is currently under pressure due to certain narrative headwinds. Trading at a P/E ratio of 16.42x and showing strong profitability metrics, InvestingPro analysis suggests the stock is slightly undervalued at current levels. The analysts expect these issues to diminish in the coming quarters, potentially leading to a re-rating of the company’s valuation multiple. The analysts also noted the company’s recent refranchising transactions, which they believe create value even under conservative assumptions.

Additionally, the report mentioned Valvoline’s announced acquisition of Breeze Autocare. Goldman Sachs provided an analysis suggesting that if Valvoline can enhance Breeze’s operations to match its mature store metrics, the purchase could imply a favorable multiple of approximately 5x over three years.

The analysts’ positive view on Valvoline reflects their confidence in the company’s ability to navigate the current market landscape and capitalize on its strategic initiatives. Valvoline’s shares are expected to benefit from these developments in the near future.

In other recent news, Valvoline Inc (NYSE:VVV). reported its second-quarter 2025 earnings, revealing an adjusted earnings per share (EPS) of $0.34, which fell short of analysts’ expectations of $0.36. However, the company’s revenue slightly surpassed forecasts, coming in at $403.2 million against the anticipated $403.11 million. Valvoline reaffirmed its full-year EBITDA guidance of $450-$470 million and net revenue guidance of $1.67-$1.73 billion, indicating confidence in future performance despite the EPS miss. RBC Capital Markets maintained an Outperform rating on Valvoline, with a price target of $48.00, suggesting an expected earnings per share acceleration in fiscal year 2026.

The firm noted that Valvoline’s same-store sales (SSS) were better than anticipated, with the trend expected to continue into the third quarter. However, the Federal Trade Commission’s second request has delayed the expected closing date of the Breeze transaction to the first quarter of fiscal year 2026. RBC Capital Markets adjusted its third-quarter SSS estimate to a 5.6% increase, down from a previous 6.1%, and slightly reduced the adjusted EBITDA estimate for the same quarter to $124 million from $126 million. Valvoline’s CEO emphasized the company’s resilience and noted that the oil change market remains strong, with customers driving more miles and keeping vehicles longer.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.