VVV - Valvoline: Fueled With Growth Potential After A Bump In The Road
Following a one-day plunge of 20%, Valvoline Inc. (VVV) shares represent a compelling buying opportunity. My 12-month target price of $24 implies a ~30% upside (including dividend), based on a 15.0x P/E multiple on 2020 earnings. My thesis is based on the following points.
- Shares fell due to traditional competition; weak DIY performance doesn’t imply a disruption by Amazon (AMZN), suggesting the market was exaggerating.
Core North America Q1 figures were shy of estimates, and management’s guidance is concerning. In addition, a few months ago, Amazon launched a private-label motor oil