Valvoline (VVV) has received a new Buy rating, initiated by TD Cowen analyst, Max Rakhlenko.
Max Rakhlenko’s rating is based on Valvoline’s promising growth prospects as a leading quick lube operator in a favorable industry. The company is expected to achieve significant revenue growth driven by an increase in franchise openings and improved same-store sales. Additionally, Valvoline’s strong market position, characterized by its reliable and convenient service, is anticipated to support continued growth in transactions and store expansion.
Furthermore, Rakhlenko foresees an expansion in EBITDA margins, projecting an increase from 27.3% in FY24 to 28.8% by FY27. This improvement is expected to be driven by operational efficiencies and a gradual shift towards a higher-margin franchise model. The company’s free cash flow is also projected to grow significantly, enabling debt reduction and potential share repurchases, which could further enhance earnings per share growth.
Rakhlenko covers the Consumer Cyclical sector, focusing on stocks such as Planet Fitness, O’Reilly Auto, and OneSpaWorld Holdings. According to TipRanks, Rakhlenko has an average return of 3.7% and a 48.95% success rate on recommended stocks.