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Valvoline Inc – Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals)
Valvoline Inc. (NYSE: VVV) is a leading worldwide marketer and supplier of premium branded lubricants and automotive services, with sales in more than 140 countries. Established in 1866, the Company's heritage spans more than 150 years, during which time it has developed powerful brand recognition across multiple product and service channels. Valvoline ranks as the No. 3 passenger car motor oil brand in the DIY market by volume. It operates and franchises nearly 1,500 quick-lube locations, and it is the No. 2 chain by number of stores in the United States under the Valvoline Instant Oil ChangeSM brand and the No. 3 chain by number of stores in Canada under the Valvoline Great Canadian Oil Change brand. It also markets Valvoline lubricants and automotive chemicals, including Valvoline High Mileage with MaxLife technology motor oil for engines over 75,000 miles; Valvoline Advanced Full Synthetic motor oil; Valvoline Premium Blue™ heavy-duty motor oil; Valvoline Multi-Vehicle Automatic Transmission Fluid; and Zerex™ antifreeze.
Analysis Results
Intrinsic Value $331.79
Latest Price $34.72
Relative Value 90% undervalued
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Cash Flow (Billions)
Analysis Parameters
New Ticker
Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 41.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.1%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 41.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 0.915 0.854
2024 1.29 1.13
2025 1.83 1.49
2026 2.59 1.97
2027 3.66 2.6
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 73.8 billion. This corresponds to a present value of 49.0 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 8.05 billion. Adding in the terminal value gives a total present value of 57.0 billion.

There are presently 172.0 million outstanding shares, so the intrinsic value per share is 331.79.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 1,621,100,000
Current Cash 23,400,000
Current Liabilities 919,400,000
Current Debt 162,500,000
Non-Cash Working Capital (NCWC) 840,800,000
Change in NCWC 585,800,000
EBIT 231,700,000
Tax Provision 34,700,000
Depreciation and Amortization 71,400,000
Capital Expenditure -132,000,000
Unlevered Free Cash Flow 701,105,482
Current Assets 1,037,000,000
Current Cash 230,000,000
Current Liabilities 569,000,000
Current Debt 17,000,000
Non-Cash Working Capital (NCWC) 255,000,000
Change in NCWC 21,000,000
EBIT 504,000,000
Tax Provision 123,000,000
Depreciation and Amortization 92,000,000
Capital Expenditure -144,000,000
Unlevered Free Cash Flow 358,834,254
Current Assets 1,438,000,000
Current Cash 760,000,000
Current Liabilities 444,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 234,000,000
Change in NCWC 4,000,000
EBIT 455,000,000
Tax Provision 134,000,000
Depreciation and Amortization 66,000,000
Capital Expenditure -151,000,000
Unlevered Free Cash Flow 238,811,529
Current Assets 797,000,000
Current Cash 159,000,000
Current Liabilities 423,000,000
Current Debt 15,000,000
Non-Cash Working Capital (NCWC) 230,000,000
Change in NCWC -18,000,000
EBIT 401,000,000
Tax Provision 57,000,000
Depreciation and Amortization 61,000,000
Capital Expenditure -108,000,000
Unlevered Free Cash Flow 249,747,169
Current Assets 725,000,000
Current Cash 96,000,000
Current Liabilities 411,000,000
Current Debt 30,000,000
Non-Cash Working Capital (NCWC) 248,000,000
Change in NCWC 47,000,000
EBIT 409,000,000
Tax Provision 166,000,000
Depreciation and Amortization 54,000,000
Capital Expenditure -93,000,000
Unlevered Free Cash Flow 212,500,000
Current Assets 790,000,000
Current Cash 201,000,000
Current Liabilities 478,000,000
Current Debt 90,000,000
Non-Cash Working Capital (NCWC) 201,000,000
Change in NCWC 24,000,000
EBIT 415,000,000
Tax Provision 186,000,000
Depreciation and Amortization 42,000,000
Capital Expenditure -68,000,000
Unlevered Free Cash Flow 255,469,387

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