VVV - Why Valvoline Stock Jumped as Much as 10% Today
Shares of Valvoline (NYSE: VVV) were up as much as 10% at noon today. Earlier Thursday, the lubricant maker and auto service provider announced the timing of its fiscal second-quarter earnings release. Although that would normally be a nonevent, this time around, the news release also included an update on what was happening around COVID-19. Investors were broadly pleased with the news.
Although Valvoline falls into the energy sector, it is actually an odd mix of businesses. Roughly two-thirds of its revenue is tied to the production of motor vehicle oils, with the rest produced by its quick-lube oil service, which includes company-owned and franchise locations. The oil-change locations provide around 45% of adjusted EBITDA. Obviously, producing motor oils falls nicely into the energy industry. The oil-change operations, which contribute disproportionately to EBITDA, are really more of a service business.
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