Is Valvoline Inc. (VVV) A Risky Investment?

Valvoline Inc. (NYSE:VVV) finished Wednesday with an addition of $0.57 to close at $35.32, an upside of 1.64 percent. An average of 1,564,920 shares of common stock have been traded in the last five days. There was a gain of $3.87 in the past week. The last 20 days have seen an average of 1,044,830 shares traded, while the 50-day average volume stands at 1,108,334.

VVV stock has increased by 10.37% in the last month. The company shares reached their 1-month lowest point of $29.81 on 09/20/21. With the stock rallying to its 52-week high on 10/13/21, shares of the company touched a low of $18.34 and a high of $34.78 in 52 weeks. In spite of this, the price is up 1.55% from the 52-week high.

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Insider Transactions

55 days have passed since Valvoline Inc. (VVV) last reported insider trading activity. O’Daniel Julie Marie, who is CLO and Corp. Secy, most recently acquired $4,969 shares at $29.81 per share on Aug 20. In this transaction, the insider spent $148,116. SVP, International, Muashsher Jamal K, disposed of 629 shares at a price of $31.70 on May 03. The insider now owns more than $19,939 worth of shares. Prior to that, SVP, President, Quick Lubes Puckett Anthony R. went on to Sale 6,212 shares at $25.01 each on Feb 25. An amount of $155,362 was transacted.

Valuation Metrics

Valvoline Inc. (VVV) has a trailing price-to-earnings (P/E) ratio of 17.45, which compares with the 18.90 for the broader industry and 19.70 for the sector. In the last five years, Valvoline Inc.’s PE ratio has ranged between 25.61 and 7.617. The stock’s beta is 1.35. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 2.27, the price-to-book (PB) ratio at 271.69, and the price-to-cash flow ratio at 44.06.

Valvoline Inc. pays a $0.50 dividend per share annually. It offers a dividend yield of 1.42%. The company has a payout ratio of 24.00%. The company’s most recent quarterly dividend payment took place on Sep. 15, and it was $0.1250 a share, without any change from last year. Its dividend has been increased for the last 1 consecutive years with the latest increase dividend $0.0120 reported on Thursday November 12 2020. Dividends have grown by 109.48% each year over the last three years.

Valvoline Inc. will next go ex-dividend on 29-Nov. The next dividend payment Valvoline Inc. will make is expected to be $0.125.

The quick ratio of Valvoline Inc. for the three months ended June 29 was 1.50, and the current ratio was 2.00, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 77.00 and a total debt to equity ratio of 77.26 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 35.50% against a 5-year average of 36.4%. Valvoline Inc.’s EBITDA margin for the year ending June 29 is 21.21%, while its operating margin for the same period stands at 17.10%. Its gross profit as reported stood at $863.0 million compared to revenue of $2.35 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Valvoline Inc.’s return on assets was 12.30%, compared to 13.5% over the last five years.

Earnings Surprise

The analyst consensus anticipated Valvoline Inc.’s latest quarter earnings to come in at $0.45 per share, but it turned out to be $0.55, a 22.20% surprise. For the quarter, EBITDA amounted to $155.0 million. Shareholders own equity worth $180.76 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Valvoline Inc. (VVV) price momentum. RSI 9-day as of the close on 13 October was 80.46%, suggesting the stock is Overbought, with historical volatility in this time frame at 43.32%.

As of today, VVV’s price is $33.17 +12.31% or $3.87 from its 5-day moving average. VVV is currently trading +10.13% higher than its 20-day SMA and +8.11% higher than its 100-day SMA. However, the stock’s current price level is +12.41% above the SMA50 and +50.11% above the SMA200.

The stochastic %K and %D were 81.53% and 75.45%, respectively, and the average true range (ATR) was 0.95. With the 14-day stochastic at 88.02% and the average true range at 0.85, the RSI (14) stands at 74.67%. The stock has reached 1.50 on the 9-day MACD Oscillator while the 14-day reading was at 1.68.

Analyst Ratings

Seaport Global Securities upgraded Valvoline Inc. (NYSE: VVV) to a a Buy rating in its most recent analyst report. Previously, the stock was rated as a a Neutral.The consensus rating for Valvoline Inc. (VVV) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell VVV, while 1 suggest investors hold. There are 1 analyst who rate the stock as underweight. The stock is rated overweight by 1 analysts, while 7 others rate it as a “buy”.

What is VVV’s price target for the next 12 months?

Analysts predict a range of price targets between $34.00 and $45.00, with a median target of $42.00. Taking a look at these predictions, the average price target given by analysts for Valvoline Inc. (VVV) stock is $41.00.


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