How are energy investors positioned?
Investing.com - CFRA has raised its price target on Valvoline (NYSE:VVV) to $42.00 from $31.00 while maintaining a Hold rating on the stock. The company, currently trading at $39.12, has demonstrated strong financial health according to InvestingPro data, with a perfect Piotroski Score of 9.
The research firm cited promising sales and margin expansion prospects for the automotive service provider, along with increasing miles driven and an aging vehicle fleet in the industry. This optimism appears well-founded, as the company maintains a healthy gross margin of 38.29% and has achieved 9.56% revenue growth in the last twelve months.
CFRA raised its fiscal year 2025 earnings per share estimate by $0.02 to $1.63 and its fiscal year 2026 estimate by $0.03 to $1.95, expecting higher than previously anticipated sales growth driven by several converging tailwinds.
Key demand drivers identified include increased vehicle miles traveled, an aging U.S. fleet requiring more frequent maintenance, and expanding OEM synthetic oil adoption across the industry.
The firm also noted that this summer’s elevated temperatures across the U.S. are accelerating oil degradation, creating additional demand for oil changes beyond normal seasonal patterns, though CFRA maintained its Hold rating as it views the shares as fully valued.
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 against the anticipated $403.11 million. Despite the EPS miss, Valvoline reaffirmed its full-year EBITDA guidance, indicating confidence in its future performance. RBC Capital maintained its Outperform rating on Valvoline, with a price target of $48, and highlighted the expected earnings per share acceleration in fiscal year 2026. Additionally, Goldman Sachs assumed coverage of Valvoline with a Buy rating, setting a price target of $45, and noted the company’s strong market position and recent refranchising transactions. Valvoline also announced the acquisition of Breeze Autocare, which Goldman Sachs believes could imply a favorable multiple if operations are enhanced. Overall, these developments reflect a mix of challenges and opportunities for Valvoline as it navigates the current market landscape.
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