![]() ![]() ![]() Our new build sites continue to accelerate system-wide and the Quick Lube market remains highly fragmented, providing ample opportunity for acquisition," said Lori Flees, Valvoline's president of Retail Services, during the company's Q1 2023 earnings call. "Over 220 sites have been approved by our new unit review committee and are in various stages of the deal process. It expects to open as many as 160 in fiscal 2023. In the first quarter alone, VVV opened 31 new locations. The company has plans to have more than 3,500 locations open over the next few years, ensuring future growth in revenues and earnings for one of Wall Street's best mid-cap stocks. ![]() Over the past five years, its CAGR for system-wide store sales increased by 18%. In the first quarter, Valvoline's system-wide same-store sales grew by 11.9% – 13% for company-owned and 11% for franchises – with a 6.8% increase in locations over Q1 2022. Its plans for the future include a compound annual growth rate (CAGR) of 15% for revenue and 17% for adjusted EBITDA (earnings before interest, taxes, depreciation and amortization). The New Valvoline will be an asset-light operation with fast growth, high margins and return on invested capital. The remainder of the proceeds will repay the debt. VVV intends to return three-quarters of the $2.2 billion in net proceeds to shareholders through dividends and share repurchases. In addition, Saudi Aramco has entered into a long-term agreement to supply its retail locations with Valvoline motor oil. The company first announced the sale of its global products business in August 2022, which Saudi Aramco paid $2.65 billion in cash to acquire. Upon completion, the Kentucky-based company became a retail services pure-play operating more than 1,746 company-owned and franchised Valvoline Instant Oil Change and Great Canadian Oil Change locations in the U.S. Valvoline's ( VVV (opens in new tab), $35.76) sale of its global products business to Saudi Aramco closed in early March. Median price target: $40.00 (11.9% implied upside).Analysts' opinions: 3 Strong Buy, 2 Buy, 2 Hold, 0 Sell, 0 Strong Sell. ![]()
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