Citi cuts Valvoline price target to $34 amid margin concerns

Citi analyst Steven Zaccone lowered his price target on Valvoline (NYSE: VVV) to $34 from $41, while maintaining a Neutral rating on the stock.

The revised target is based on approximately 17 times Zaccone's new fiscal year 2028 earnings per share estimate. The analyst kept fiscal year 2026 estimates unchanged but modestly reduced fiscal year 2027 EPS projections to reflect more conservative gross margin planning.

Zaccone noted that geopolitical uncertainty related to Iran and potential disruption to the Strait of Hormuz limits visibility into fiscal year 2027 gross margin recovery. He said he expects Valvoline's initial fiscal year 2027 guidance to come in below the company's EPS algorithm, citing the geopolitical backdrop and a second-half weighting from a gross margin perspective.

The analyst said the firm came away from a brief meeting with Valvoline's investor relations team in New York "incrementally more positive on pricing tailwinds" to same-store sales, and expressed confidence that the company should surpass fourth-quarter expectations, which he characterized as "measured and conservative."

The update follows Valvoline's recent business update, which included a new $500 million share repurchase authorization and confirmation that performance is in line with its fiscal year 2026 outlook.

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