It's been a mediocre week for Valvoline Inc. (NYSE:VVV) shareholders, with the stock dropping 10% to US$38.56 in the week since its latest full-year results. It looks like a credible result overall - although revenues of US$1.6b were in line with what the analysts predicted, Valvoline surprised by delivering a statutory profit of US$1.61 per share, a notable 19% above expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the most recent consensus for Valvoline from twelve analysts is for revenues of US$1.71b in 2025. If met, it would imply a modest 5.5% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to dip 5.9% to US$1.57 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.82b and earnings per share (EPS) of US$1.76 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The consensus price target fell 5.9% to US$43.75, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Valvoline at US$49.00 per share, while the most bearish prices it at US$37.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Valvoline's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Valvoline is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.5% annualised growth until the end of 2025. If achieved, this would be a much better result than the 13% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.7% annually. So while Valvoline's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Valvoline. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Valvoline going out to 2027, and you can see them free on our platform here.

Even so, be aware that Valvoline is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.