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Valvoline Inc VVV

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Valvoline’s Strength Continues to Build Despite Input Cost Pressures; Shares Seem Expensive

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

We plan a mid- to high-single-digit percentage increase for our $25 fair value estimate for narrow-moat Valvoline, reflecting strong third-quarter earnings and time value of money. With much of its near-term outperformance a function of pandemic-related volatility, we continue to expect mid-single-digit percentage revenue growth and low-20s adjusted EBITDA margins over the next decade.

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Company Profile

Business Description

Valvoline produces, markets, and sells automotive maintenance products, particularly lubricants, to retail outlets and installer customers worldwide. The company caters to do-it-yourself customers by selling products to auto-parts stores and leading mass-merchandisers via direct sales and distributors. Valvoline targets the do-it-for-me segment by selling products to car dealers, general repair shops, and third-party quick-lube chains. Valvoline also operates and franchises quick-lube oil change centers, in addition to selling products and providing Valvoline-branded signage to smaller-scale independent operators. Product sales accounted for nearly 65% of fiscal 2020 sales, with the balance generated by its retail services (quick-lube) unit.

Contact
100 Valvoline Way
Lexington, KY, 40509
T +1 859 357-7777
Sector Energy
Industry Oil & Gas Refining & Marketing
Most Recent Earnings Jun 30, 2021
Fiscal Year End Sep 30, 2021
Stock Type Hard Assets
Employees 8,800

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