Analyst Simeon Gutman of Morgan Stanley maintained a Hold rating on Valvoline (VVV – Research Report), with a price target of $39.00.
Simeon Gutman has given his Hold rating due to a combination of factors that reflect both the strengths and challenges facing Valvoline. The company’s growth potential and value proposition remain strong, yet there are immediate challenges that could impact financial performance. Specifically, the anticipated slowdown in top-line growth for 2025, combined with limited pricing strategies, suggests that comparable sales might fall in the lower range of expectations. Additionally, EBITDA is expected to be at the lower end of the guidance range, with potential margin contraction due to SG&A deleverage.
Despite these challenges, there are positive aspects to consider. The company’s defensive business model and strong growth drivers are still intact, and there is a slight positive tilt in the risk/reward scenario. While the path to normalized growth appears uneven due to the uncertain macroeconomic and consumer environment, the long-term outlook remains cautiously optimistic. Therefore, the Hold rating reflects a balanced view of the potential risks and rewards associated with Valvoline’s stock.
Based on the recent corporate insider activity of 35 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of VVV in relation to earlier this year.