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Top 5 Auto Stocks by Wall Street Ratings in September 2017

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13
Part 13
Top 5 Auto Stocks by Wall Street Ratings in September 2017 PART 13 OF 13

Analysts on Auto Parts Retailers: O’Reilly Automotive at the Top

US auto parts retailers

In the previous part of this series, we saw that auto parts retailers have underperformed the broader market and automakers so far in 2017. Dismal US auto sales in the first eight months of 2017 have fueled the possibility of tough times ahead for the auto industry. Similarly, auto parts retailers’ sales are also going through a phase of stagnation lately.

Now let’s look at Wall Street analysts’ recommendations for the three largest US auto parts retailers: O’Reilly Automotive (ORLY), AutoZone (AZO), and Advance Auto Parts (AAP).

Analysts on Auto Parts Retailers: O’Reilly Automotive at the Top

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September update: O’Reilly tops the list

According to data compiled by Thomson Reuters on September 25, 2017, 62.0%, 52.0%, and 44.0% of analysts have given “buy” recommendations for ORLY, AAP, and AZO, respectively. A majority of analysts currently favor a “buy” recommendation for O’Reilly Automotive.

About 38.0% and 52.0% of analysts have recommended a “hold” for O’Reilly and AutoZone, respectively, and 37.0% have recommended a “hold” for AAP.

None of the analysts covering O’Reilly have given it a “sell” recommendation, while 4.0% and 11.0% of the analysts have suggested a “sell” for AutoZone and Advance Auto Parts, respectively.

Comparing upside potentials

As of September 25, 2017, auto parts companies’ 12-month stock price targets and upside potential are as follows:

  • O’Reilly Automotive: The consensus price target of $229 reflects a return potential of ~6.4% from its market price of $215.15.
  • AutoZone: The stock is trading at $583.48; analysts have given it a target price of $641.23, which reflects an upside potential of 9.9%.
  • Advance Auto Parts: The consensus price target of $107.43 reflects a 9.7% upside potential from its market price of $97.94.

Despite the recent mixed performances, analysts’ ratings for auto parts retailers are more optimistic than they are for automakers (XLY) such as General Motors (GM) and Fiat Chrysler (FCAU).

Be sure to visit Market Realists’ Autos page for ongoing updates on the auto industry.

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