Valvoline (VVV) lowered its medium-term algorithm to achievable levels, and insights into the Breeze Autocare deal indicate fiscal 2026 guidance is conservative, RBC Capital Markets said in a research report Thursday.
The company now projects adjusted EPS growth in the mid-to-high teens, net sales growth of 9% to 11%, and same-store-sales growth of 3% to 5% for 2026 through 2028. It also expects 100 to 200 basis points of adjusted earnings before interest, taxes, depreciation, and amortization margin expansion by fiscal 2028, driven by expense leverage on transaction growth and operational efficiencies, according to the note.
The company has no active plans for refranchising, and future opportunities would be assessed on a case-by-case basis. Since the acquisition of Breeze stores overlaps with franchisee territories, some refranchising is likely to take place eventually, analysts wrote.
Higher fleet penetration should also boost utilization, as fleet customers typically opt for maintenance during outside peak retail times, the brokerage said. The company is leveraging technology to capitalize on this segment and enhance the experience for fleet managers.
RBC reiterated Valvoline as one of its top ideas heading into 2026, and maintained its outperform rating on the stock, with a price target of $44 per share.
Price: 30.79, Change: +0.26, Percent Change: +0.85
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