RBC Capital reaffirmed its Outperform rating on Valvoline (NYSE: VVV) and kept a $44.00 price target, according to a research note issued Tuesday. The bank said the target is consistent with InvestingPro fair value calculations that indicate Valvoline appears undervalued, while sell-side analysts maintain a consensus Buy recommendation.
RBC projects system-wide same-store sales for Valvoline in the first quarter of fiscal 2026 will rise 4.9%, in line with consensus estimates. The firm is forecasting adjusted EBITDA of $114.3 million for that period, a touch above the consensus figure of $113.5 million.
In its note, RBC flagged what it described as "significant conservatism" embedded in Valvoline management’s fiscal 2026 EBITDA guidance as the company works through integrating Breeze Autocare. RBC said that conservatism leaves room for the company to potentially raise the lower end of that guidance later in the fiscal year if integration progresses as planned.
RBC’s $44 price target equates to roughly 13 times its calendar year 2026 adjusted EBITDA estimate of $568 million, a figure that sits above consensus EBITDA expectations of $559 million for the same period.
On the market, Valvoline shares have outperformed year-to-date, rising 14% compared with a 1% increase for the S&P 500. At the same time, short interest in Valvoline has climbed to 52-week highs near 10.5%.
Other recent developments cited by brokers include the retirement announcement for Senior Vice President Mary E. Meixelsperger, effective December 29, 2025. Jefferies resumed coverage of Valvoline with a Buy rating and set a $40.00 price target after Valvoline’s acquisition of 162 Breeze Autocare locations; that deal prompted Jefferies to revise its financial projections for the company.
TD Cowen also moved its valuations higher, raising its price target to $38.00 from $37.00 while keeping a Buy rating, citing improving investor sentiment and potential upside to fiscal 2026 estimates. TD Cowen reiterated a Buy rating with a $37.00 target after Valvoline’s Analyst Day and described the company’s updated earnings-per-share guidance as reasonable and possibly conservative.
Collectively, the analyst responses and the company’s acquisition activity have produced a generally constructive tone among brokers covering Valvoline, with upside to fiscal 2026 estimates noted if integration and execution meet expectations.
Summary
RBC retains an Outperform rating and $44.00 target on Valvoline, projecting modest same-store sales growth and adjusted EBITDA slightly above consensus for Q1 fiscal 2026. The firm sees management’s guidance as conservative amid the Breeze Autocare integration, implying potential for upward revisions later in the fiscal year. Other brokers, including Jefferies and TD Cowen, have also expressed Buy ratings and adjusted price targets following the Breeze acquisition and company disclosures.
Key points
- RBC keeps an Outperform rating and $44.00 target; InvestingPro data indicate Valvoline is undervalued based on Fair Value calculations.
- RBC projects Q1 fiscal 2026 system-wide same-store sales growth of 4.9% and adjusted EBITDA of $114.3 million, slightly above consensus.
- Jefferies and TD Cowen have issued or updated Buy ratings and price targets following Valvoline’s acquisition of 162 Breeze Autocare locations; market reaction shows a 14% YTD share gain versus a 1% rise for the S&P 500.
Risks and uncertainties
- Conservative company guidance - If management’s fiscal 2026 EBITDA guidance remains conservative, it could mask near-term upside but also reflect integration uncertainties; this affects investors and equity market expectations.
- Integration of Breeze Autocare - Executing on the integration of 162 Breeze locations creates operational risk that could influence service network efficiency and near-term margins, with implications for automotive services and retail sectors.
- Market positioning and short interest - Elevated short interest near 10.5% introduces potential stock volatility that may impact trading dynamics for the equity.