Piper Sandler Starts Valvoline (VVV) at Overweight

Piper Sandler analyst Peter Keith initiates coverage on Valvoline (NYSE: VVV) with a Overweight rating and a price target of $49.00.

The analyst comments: "We initiate coverage of VVV with an Overweight rating and $49 PT (24x FY25E EPS). After divesting its Global Products business in early 2023, VVV is now a pure-play quick lube service provider with an attractive growth outlook. Considering a fragmented industry landscape with share gain potential, a multitude of comp sales drivers, and majority of its 7-10% growth coming from franchisee growth - we are comfortable with VVV's algo for top-line growth of 14-16% and EPS growth of 20%+. Also, despite an attractive industry landscape, quick lube has not seen nearly the level of private equity investment vis-à-vis other auto aftermarket services. We view EV risk as 25-30 year risk, and would expect VVV's model to evolve over this time to serve both EV's and ICE vehicles. For valuation, we use a 24x multiple similar to other strong consumer unit/store growth companies."

For an analyst ratings summary and ratings history on Valvoline click here. For more ratings news on Valvoline click here.

Shares of Valvoline closed at $40.60 yesterday.

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