Valvoline (VVV) reported fiscal first-quarter results on Wednesday with earnings per share (EPS) of $0.47 vs. $0.39 for the same quarter last year that came in $0.04 better than expectations.

Operating income increased in all segments, led by a 21% gain in the QuikLube segment. Despite the strength of the report, the stock fell 4% yesterday.

I believe this reflects the fact there was some disappointment that QuikLube did not grow its earnings more due to its 17% increase in revenues in the unit. However, as the company mentioned on the conference call, COVID-19 related issues continue to weigh on the bottom line.

The stock is running into resistance at $25 a share but continued strong results this year, with QuikLube sales up double-digit-percentages in January, should allow the stock to reach my $27 target. Keep in mind this is just 16.3X fiscal September 2021 EPS estimates of $1.65. I am raising my buy under price to $22.50.