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What Auto Parts Retailers Have under the Tree This December

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Dec. 4 2020, Updated 10:53 a.m. ET

Auto part retailer stocks today

O’Reilly Automotive (ORLY), AutoZone (AZO), and Advance Auto Parts (AAP) are the three largest auto part retailers in the US. The stocks of all these three auto parts retailers have touched new record highs over the past couple of years.

For the past few quarters, these companies have largely struggled with sales growth. Lower sales growth and a weak industry outlook took a toll on these stocks in the first three quarters of 2017. But over the past month, we’ve seen a sharp recovery among these stocks, likely due to investors’ high expectations of better industry prospects in 2018.

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Outperformed the broader market

As of December 12, O’Reilly Automotive has risen 15.3% over the past month. By comparison, AutoZone and Advance Auto Parts have risen 18.5% and 24.2%, respectively. During the same period, the S&P 500 Index (SPY) (SPX-INDEX) has just risen 3.1%.

So far this December, ORLY, AZO, and AAP have risen 4.5%, 3.5%, and 2.0%, respectively.

Negative territory on a YTD basis

Still, in 2017 so far, the stocks of auto part retailers are still trading in negative territory. ORLY, AZO, and AAP have lost ~11.3%, ~10.0%, and ~39.1%, respectively, YTD (year-to-date), as of December 12. Meanwhile, automakers (XLY) General Motor (GM) and Fiat Chrysler Automobiles (FCAU) have risen by 19.2% and 95.8%, respectively, YTD.

In the next and final part of this series, we’ll discuss what analysts are recommending for auto parts retailers in the final month of 2017.

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