Valvoline (VVV:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Valvoline(VVV:NYS)

Energy:Oil & Gas Refining & Marketing

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$20.33 (USD) 23/11/2018

Weighted Valuation
$22.35 (USD)

Overall Rating
Undervalued by 9.9%

Valuation Models Analyst Consensus: $23.00 (USD)
(in order of importance) Multiples: $21.38 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (VVV:NYS USD)

Price 20.33
Range 20.03 – 20.59
52 week 19.05 – 25.40
Open 20.03
Vol / Avg. 681141/1.93M
Mkt cap 3.83B
P/E 24.20
Div/yield 0.30/0.01
EPS 0.84
Shares 188.16M
Beta 0.00

Company Description

Valvoline produces, markets, and sells a variety of 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. Additionally, 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. North American product sales accounted for 48% of fiscal 2017 sales, while international operations and quick-lube centers each generated 26%.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for VVV:NYS

Using a discounted cash flow model we generated an intrinsic value of $28.37 (USD) for VVV:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

VVV:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $28.37 1% 5% 1% 5%
WACC (or Ke) 7.06 $36.62 $22.89
Terminal Growth Rate 2.10 $23.36 $35.90
Tax Rate 0.29 $30.95 $25.79
Cash Flow 560,075,848 $26.37 $30.37
Capital Expenditures -61,020,000 $28.16 $28.58
Long Term Debt 740,000,000 $28.57 $28.17

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $8.47 (USD) for VVV:NYS. We also generated a valuation of $16.86 (USD) using other metrics and comparables.
The comparable companies were CVR Energy (CVI:NYS), HollyFrontier (HFC:NYS), World Fuel Services (INT:NYS), PBF Energy (PBF:NYS) and Sunoco (SUN:NYS).

Company VVV:NYS End Date Value
Earnings/Share $0.84 (USD)
Book Value/Share ($1.53) (USD)
Sales/Share $11.13 (USD)
Cash Flow/Share ($0.53) (USD)
EBITDA/Share $2.28 (USD)
Price Based on Comps Adjustment Factor (%)
$7.32 (USD) 0.0
$0.00 (USD) 0.0
$3.68 (USD) 0.0
($6.71) (USD) 0.0
$21.13 (USD) 0.0
VVV:NYS Ratios Used Average Values CVI:NYS HFC:NYS INT:NYS PBF:NYS SUN:NYS
17.63 PE Ratio 8.72 9.31 8.14 0.00 6.62 10.81
0.00 PB Ratio 2.15 3.49 1.94 1.22 1.64 2.46
1.79 PS Ratio 0.33 0.55 0.69 0.06 0.18 0.18
0.00 PCF Ratio 11.02 10.67 9.26 26.90 4.50 3.78
8.71 EV to EBITDA 9.27 8.64 5.75 17.05 4.45 10.46

Multiples

Using a multiples approach we generated a valuation of  $21.38 (USD) for VVV:NYS

Company VVV:NYS End Date Value
Earnings/Share $0.84 (USD)
Book Value/Share ($1.53) (USD)
Sales/Share $11.13 (USD)
Cash Flow/Share ($0.53) (USD)
EBITDA/Share $2.28 (USD)
Price Based on Comps Adjustment Factor
$15.12 (USD) 0
$0.00 (USD) 0
$25.39 (USD) 0
$0.00 (USD) 0
$23.63 (USD) 0
Ratios Ratio Average
PE Ratio 18.00
PB Ratio 0.00
PS Ratio 2.28
PCF Ratio 16.18
EV to EBITDA 10.37

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  VVV:NYS for the last 0 years was  0.00

We ran the Adjusted Book Value for  VVV:NYS and generated a book value of  ($1.90) (USD)
By multiplying these we get an adjusted valuation of  $0.00 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for VVV:NYS. The 2 analysts have a concensus valuation for VVV:NYS for 2019 of $23.00 (USD).

VVV:NYS Valvoline

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 2 0 3.7500 Outperform 2018-11-22

Current Price: 20.33 USD

Analyst Consensus
USD Millions 2019 2020
Mean EPS 1.44 1.60
# EPS Analysts 2 1
Mean Revenue 2,443.20 2,581.70
# Revenue Analysts 2 1
Mean Target Price 23.00
Mean Cash Flow 1.77
Mean EBITDA 496.40 533.10
Mean Net Income 275.60 302.40
Mean Debt Outstanding
Mean Tax Rate 25.50 25.50
Mean Growth Rate 8.34
Mean Capital Expenditure 119.30 122.90

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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