Download PDF

1. Company Snapshot

1.a. Company Description

Valvoline Inc.manufactures, markets, and supplies, engine and automotive maintenance products and services.It operates through two segments, Retail Services and Global Products.


The company offers lubricants for passenger car, light duty, and heavy duty; antifreeze/coolants for original equipment manufacturers; functional and maintenance chemicals, such as brake fluids and power steering fluids, as well as specialty coatings for automotive and industrial applications; and oil and air filters for light-duty vehicles.It also provides batteries, windshield wiper blades, light bulbs, serpentine belts, and drain plugs.In addition, the company operates Valvoline instant oil change service centers.


As of September 30, 2021, it operated and franchised approximately 1,594 quick-lube locations under the Valvoline Instant Oil Change brand in the United States and the Great Canadian Oil Change brand in Canada.The company also serves car dealers, general repair shops, and third-party quick lube locations, as well as through distributors and licensees.It has operations in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America.


The company was founded in 1866 and is headquartered in Lexington, Kentucky.

Show Full description

1.b. Last Insights on VVV

Valvoline Inc.'s recent performance was driven by several positive factors. The company reported 5.8% system-wide same-store sales growth, with sales reaching $403 million in the second quarter. Additionally, Valvoline announced the appointment of Kevin Willis as its new Chief Financial Officer, effective May 19, 2025, who will succeed Mary Meixelsperger. The company also received a positive mention from Goldman Sachs, which identified Valvoline as one of three US stocks set to rally. Furthermore, Valvoline's Oilympics competition, which highlights the best in the automotive preventive maintenance industry, was held in Cincinnati on May 13, showcasing the company's commitment to innovation and excellence.

1.c. Company Highlights

2. Valvoline's FY 2025 Results: A Strong Finish with a Promising Outlook

Valvoline Inc.'s fiscal year 2025 results show a robust financial performance, with system-wide store sales increasing 10% to $3.5 billion. The company added 170 new stores, bringing the total to 2,180 across the US and Canada. Adjusted EBITDA grew double-digit, while adjusted EPS came in at $1.59 per share. The strong Q4 performance, with 56 net new system-wide stores, capped off a successful year. Actual EPS for the quarter was $0.708, beating estimates of $0.48.

Publication Date: Nov -20

📋 Highlights
  • Strong Sales & Store Growth:: System-wide sales rose 10% to $3.5B, with 170 new stores added, totaling 2,180 locations.
  • EBITDA & EPS Performance:: Adjusted EBITDA grew double-digit, and adjusted EPS reached $1.59/share, driven by Q4 strength.
  • Breeze Acquisition Impact:: $593M deal to acquire 162 stores (closing Dec 1) will boost store count to ~2,340, though margins are lower.
  • 2026 Guidance:: Targets 4-6% same-store sales growth, 330-360 new stores, and $1.60-$1.70 adjusted EPS with $250M-$280M CapEx.
  • Leverage & Cost Efficiency:: Post-acquisition leverage ratio of 4.2x, with plans to reduce via EBITDA growth and debt reduction in 18-24 months.

Acquisition and Expansion Plans

The Breeze Auto Care acquisition, set to close on December 1, is expected to add 162 net store additions, further expanding Valvoline's presence. The deal will increase the leverage ratio to approximately 4.2 times, but the company plans to return to its target leverage ratio within 18-24 months through EBITDA growth and debt reduction. With the acquisition, Valvoline is poised to become the category leader with over 2,300 stores.

Guidance and Outlook

Fiscal 2026 guidance includes system-wide same-store sales growth of 4-6%, network growth of 330-360 new stores, and adjusted EPS of $1.60-$1.70 per share. The company expects to drive continued financial performance, focusing on its core business, delivering sustainable network growth, and innovating to meet evolving customer needs. An investor update is planned for December 11 to discuss long-term growth targets and strategic priorities.

Valuation and Metrics

With a P/E Ratio of 14.25 and an EV/EBITDA of 9.89, Valvoline's valuation appears reasonable considering its growth prospects. The company's ROE of 113.74% and ROIC of 14.64% indicate strong profitability. Analysts estimate next year's revenue growth at 15.3%, suggesting a positive outlook. The Net Debt / EBITDA ratio of 2.51 reflects a manageable debt burden.

Operational Highlights

The company is seeing resilient demand for its services, with premiumization up across all customer types. Intervals between services have been stable, and the company expects to drive growth through its core business and the Breeze acquisition. With a focus on optimizing returns, Valvoline targets 30% cash on cash returns and mid-to-high teens IRR on new units.

3. NewsRoom

Card image cap

Valvoline Closes Breeze Autocare Deal, Boosts Growth Strategy

Dec -03

Source: zacks.com

Card image cap

Valvoline Inc. Announces Closing of Acquisition of Breeze Autocare

Dec -01

Source: businesswire.com

Card image cap

5,802 Shares in Valvoline $VVV Bought by AlphaCore Capital LLC

Nov -26

Source: defenseworld.net

Card image cap

Valvoline Instant Oil Change Reaches One Million Dollar Fundraising Milestone for the American Cancer Society Road To Recovery® Program

Nov -24

Source: businesswire.com

Card image cap

These Analysts Slash Their Forecasts On Valvoline Following Weak Earnings

Nov -20

Source: benzinga.com

Card image cap

Valvoline's Plunge In Recent Months Offers A Slick Opportunity

Nov -19

Source: seekingalpha.com

Card image cap

Valvoline Inc. Announces Nomination of Janet Wong and Chris Carr to its Board of Directors and Retirement of Board Members Mary Twinem and Vada Manager

Nov -19

Source: businesswire.com

Card image cap

Valvoline Inc. (VVV) Q4 2025 Earnings Call Transcript

Nov -19

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.36%)

6. Segments

Oil Changes and Related Fees

Expected Growth: 12%

Valvoline's 12% growth in Oil Changes and Related Fees is driven by increasing vehicle miles driven, rising demand for preventive maintenance, and growing market share in the do-it-for-me (DIFM) segment. Additionally, the company's strategic expansion into new markets, improved customer retention, and premium product offerings also contribute to this growth.

Non-oil Changes and Related Fees

Expected Growth: 14%

Valvoline's 14% growth in Non-oil Changes and Related Fees is driven by increasing demand for premium maintenance services, expansion of quick-lube services, and strategic partnerships. Additionally, the company's focus on digital marketing and customer loyalty programs has contributed to the growth. Furthermore, the rise of electric and hybrid vehicles has led to increased demand for specialized maintenance services, benefiting Valvoline's business.

Franchise Fees and Other

Expected Growth: 11%

Valvoline Inc.'s 11% growth in Franchise Fees and Other is driven by increasing demand for quick-lube services, expansion of existing franchisees, and strategic acquisitions. Additionally, the company's focus on digital marketing and customer loyalty programs has contributed to higher royalties from franchisees. Furthermore, the growth of the company's installed base of quick-lube locations has led to higher fees from franchisees.

7. Detailed Products

Valvoline All-Car Motor Oils

A range of motor oils designed for passenger vehicles, providing superior engine protection and fuel efficiency.

Valvoline Synthetic Motor Oils

High-performance synthetic motor oils for extreme temperatures, heavy loads, and high-performance engines.

Valvoline Diesel Motor Oils

Heavy-duty diesel motor oils designed for diesel engines, providing superior soot control and fuel efficiency.

Valvoline Transmission Fluids

A range of transmission fluids designed for automatic, manual, and continuously variable transmissions.

Valvoline Brake Fluids

High-performance brake fluids designed for passenger vehicles, providing superior braking performance.

Valvoline Greases

A range of greases designed for wheel bearings, chassis, and other applications.

Valvoline Coolants

A range of coolants designed for passenger vehicles, providing superior engine cooling and corrosion protection.

Valvoline Fleet and Industrial Lubricants

A range of lubricants designed for commercial fleets, construction, and industrial applications.

Valvoline Instant Oil Change Services

Convenient oil change services for passenger vehicles, providing quick and reliable maintenance.

8. Valvoline Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Valvoline Inc. faces moderate threat from substitutes, as customers have limited alternatives for lubricants and automotive services. However, the company's strong brand reputation and wide distribution network help mitigate this threat.

Bargaining Power Of Customers

Valvoline Inc. has a large customer base, which reduces the bargaining power of individual customers. Additionally, the company's diversified product offerings and strong brand reputation limit customers' ability to negotiate prices.

Bargaining Power Of Suppliers

Valvoline Inc. relies on a few large suppliers for raw materials, which gives them some bargaining power. However, the company's long-term contracts and diversified supply chain help mitigate this risk.

Threat Of New Entrants

The lubricant and automotive services industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This limits the threat of new entrants and allows Valvoline Inc. to maintain its market position.

Intensity Of Rivalry

The lubricant and automotive services industry is highly competitive, with several established players competing for market share. Valvoline Inc. faces intense rivalry from companies like Castrol and Mobil, which can lead to pricing pressures and advertising wars.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 90.19%
Debt Cost 3.95%
Equity Weight 9.81%
Equity Cost 11.15%
WACC 4.65%
Leverage 919.00%

11. Quality Control: Valvoline Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
HF Sinclair

A-Score: 5.9/10

Value: 7.3

Growth: 4.1

Quality: 3.9

Yield: 7.0

Momentum: 7.0

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Magnolia Oil & Gas

A-Score: 5.8/10

Value: 6.0

Growth: 6.6

Quality: 7.1

Yield: 5.0

Momentum: 3.5

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
Sunoco

A-Score: 5.5/10

Value: 3.9

Growth: 4.0

Quality: 2.5

Yield: 10.0

Momentum: 3.5

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Delek US Holdings

A-Score: 5.3/10

Value: 8.0

Growth: 2.0

Quality: 3.2

Yield: 6.0

Momentum: 9.5

Volatility: 3.0

1-Year Total Return ->

View Full Report
Stock-Card
PBF Energy

A-Score: 4.4/10

Value: 9.6

Growth: 1.8

Quality: 4.2

Yield: 5.0

Momentum: 3.5

Volatility: 2.3

1-Year Total Return ->

View Full Report
Stock-Card
Valvoline

A-Score: 4.0/10

Value: 2.9

Growth: 4.9

Quality: 5.8

Yield: 0.0

Momentum: 3.0

Volatility: 7.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

31.02$

Current Price

31.02$

Potential

-0.00%

Expected Cash-Flows