Analysts Lack Enthusiasm After Valvoline Quiet Period Expires

Companies and Brands

Published: October 18, 2016 3:03 pm

Last Updated: January 13, 2020 2:14 am

Valvoline Inc. (NYSE: VVV) has seen its quiet period come to an end after the company’s successful initial public offering from September. The company’s September 23 IPO was at $22.00 per share for 30 million shares.

By the time the offer closed, the underwriters ended up selling 34.5 million shares after considering the over-allotment option. As a reminder, Ashland Global Holdings Inc. (NYSE: ASH) still owns 170,000,000 shares of Valvoline`s common stock after the completion. This represents approximately 83% of the total outstanding shares of Valvoline`s common stock.

24/7 Wall St. wanted to see how things have gone and how the analysts have decided to cover Valvoline. Valvoline shares were up over $2.00 and approaching $24.50 on its first day of trading and the reality is that not much has happened since that time.

Most analyst coverage seen so far is not the most enthusiastic we have seen for upside price targets, something which is keeping Valvoline shares down. Two ‘Buy’ ratings have been seen so far:

BofA Merrill Lynch started coverage as Buy with a $27 price objective.
Citigroup started coverage with a Buy rating with a $27 price target.

Valvoline’s more cautious ratings were seen as follows:

Deutsche Bank started coverage as Hold with a $24 price target.
Goldman Sachs started coverage with a Neutral rating and a $24 price target.
Morgan Stanley started coverage as Equal-Weight with a $26 price target.
SunTrust Robinson Humphrey started coverage as Hold with a $25.00 price target.

Scotiabank also acted as senior co-manager for the offering and BTIG, Mizuho Securities, PNC Capital Markets were listed as co-managers. Analyst ratings and reports from those firms have not yet been seen.

Back on September 27, the firm Monnes Crespi & Hardt initiated coverage with a Buy rating and issued a $27.00 price target. Its shares were trading at $23.98 prior to that call.

As for the credit ratings as a standalone entity, S&P Global Ratings issued a ‘BB’ rating and Outlook Stable note on October 4.

Valvoline shares were last seen trading on Tuesday afternoon down 15 cents at $22.96. Its post-IPO range has been $22.60 to $24.51.

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