How are energy investors positioned?
On Tuesday, Stifel analysts maintained their Hold rating and $42.00 price target for Valvoline Inc . (NYSE:VVV), a leading provider of automotive services and lubricants. Currently trading at $36.71, the stock sits below Stifel’s target, while broader analyst targets range from $37 to $49. According to InvestingPro data, management has been actively buying back shares, showing confidence in the company’s prospects. Stifel’s analysis anticipates that Valvoline will report same-store sales (SSS) that align with or exceed their projections, which are currently set at a 7.0% increase, closely matching the Street’s 7.3% expectation.
The firm’s analysts project that Valvoline’s earnings per share (EPS) will be in line with their estimate of $0.31, which is slightly above the Street’s consensus of $0.30. With earnings due in just two days on February 6, InvestingPro subscribers can access comprehensive analysis and 6 additional ProTips about Valvoline’s financial health. The focus for investors, according to Stifel, is likely to be on the sustainability of SSS momentum as the company enters its second fiscal quarter, particularly given its impressive 12.16% revenue growth over the last twelve months. This period is significant as it compares against a previous increase in non-oil change revenue (NOCR) from last year, attributed to re-training and other initiatives.
Stifel notes that the potential for mid-single-digit comp growth is supported by the maturation of newer stores and ongoing ticket tailwinds. However, there are near-term concerns regarding competitive discounting from dealers and quick-lube chains, as well as the broader impact of consumer spending on car counts.
Despite these concerns, Stifel expects Valvoline to reaffirm its full-year guidance for SSS and EPS. The company’s ability to deliver consistent growth amid competitive and economic challenges will remain a key point of interest for investors monitoring the company’s performance. Trading at a P/E ratio of 22.72x and showing strong profitability metrics, detailed valuation analysis is available through InvestingPro’s comprehensive research reports, which provide deep-dive analysis of 1,400+ US stocks.
In other recent news, Valvoline Inc. has experienced several significant developments. Shareholders have approved the election of board nominees and the appointment of Ernst & Young LLP as the company’s independent auditor for fiscal 2025, indicating confidence in Valvoline’s leadership and strategic direction.
In the realm of financial analysis, Morgan Stanley (NYSE:MS) has downgraded Valvoline’s stock from Overweight to Equalweight, citing a reassessment of the company’s expected earnings and a change in the valuation multiple. In contrast, Stifel initiated coverage on Valvoline, maintaining a Hold rating and setting a price target of $42.00, while Mizuho (NYSE:MFG) Securities reiterated an Outperform rating with a $46.00 price target, expressing confidence in Valvoline’s growth-oriented strategy.
However, Mizuho also adjusted Valvoline’s price target to $46.00 from the previous $50.00, following the announcement of weaker-than-expected financial guidance for FY25E. Despite these recent developments, it’s important to note that these are based on analyses and projections from the respective firms.
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