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Investing.com - RBC Capital has reiterated an Outperform rating and $48.00 price target on Valvoline (NYSE:VVV), maintaining its positive outlook on the quick lube service provider. Currently trading at $39.02, InvestingPro analysis suggests the stock is slightly undervalued, with a perfect Piotroski Score of 9 indicating strong financial health.
The firm projects Valvoline’s fiscal third-quarter system-wide same-store sales to increase by 5.6%, aligning with consensus estimates, while forecasting adjusted EBITDA of $124 million compared to the consensus of $123 million. The company has demonstrated solid growth with revenue increasing 9.56% over the last twelve months, and trades at an attractive PEG ratio of 0.33. Get deeper insights with InvestingPro, which offers 8 additional key tips about Valvoline’s investment potential.
RBC Capital’s channel checks throughout the quarter indicated a consistent competitive environment in the quick lube sector, with expectations that same-store sales will moderate somewhat from fiscal second-quarter levels primarily due to Easter timing shifts.
The investment firm anticipates sales will re-accelerate in the fiscal fourth quarter as the Easter timing shift headwind dissipates, the company laps the Crowdstrike outage from a year ago, and benefits from same-store sales reclassification reach their peak.
RBC Capital’s $48 price target is based on approximately 13 times its calendar year 2026 adjusted EBITDA estimate of $597 million, which exceeds the consensus estimate of $553 million, with the firm highlighting that the path to earnings per share acceleration in fiscal year 2026 will become increasingly clear.
In other recent news, Valvoline Inc . 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 exceeded forecasts, coming in at $403.2 million compared to the anticipated $403.11 million. Despite the EPS miss, Valvoline reaffirmed its full-year EBITDA guidance, indicating confidence in its future performance. RBC Capital Markets maintained an Outperform rating for Valvoline, with a price target of $48, and noted an expected earnings per share acceleration in fiscal year 2026. The firm adjusted its third-quarter same-store sales estimate to a 5.6% increase, slightly down from the previous 6.1%, due to the shift in Easter timing. Goldman Sachs assumed coverage of Valvoline with a Buy rating, setting a price target of $45, and highlighted the company’s recent acquisition of Breeze Autocare as a potential value creator. The Federal Trade Commission’s second request has delayed the closing date of the Breeze transaction to the first quarter of fiscal year 2026. Valvoline’s ongoing refranchising efforts and technology investments are expected to impact profitability but are anticipated to decrease as the year progresses.
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