Valvoline’s Strategic Positioning and Growth Potential Justifies Buy Rating

In a report released today, David Lantz from Wells Fargo maintained a Buy rating on Valvoline, with a price target of $42.00.

David Lantz has given his Buy rating due to a combination of factors that highlight Valvoline’s strategic positioning and growth potential. The company has shown resilience with its shares rising significantly from recent lows, and it trades at a valuation that suggests underappreciated defensive growth. The non-discretionary nature of Valvoline’s core business, primarily oil changes, provides a stable demand backdrop, and the easing of previous headwinds such as hurricane impacts further strengthens its outlook.
Moreover, Lantz is optimistic about Valvoline’s ability to accelerate franchise unit growth, supported by strong interest from both new and existing partners. The company is poised for sustainable mid-single-digit comparable sales growth and high single-digit unit growth, driven by initiatives that resonate well with the market. Despite some uncertainties, such as gross margin visibility due to crude oil volatility, the overall long-term opportunity appears compelling, justifying the Buy rating.

Based on the recent corporate insider activity of 36 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of VVV in relation to earlier this year.