Auto parts retailers’ stocks
According to Reuters data, as of February 20, 2018, ~42%, 68%, and 46% of analysts have given “buy” recommendations to AutoZone (AZO), O’Reilly Automotive (ORLY), and Advance Auto Parts (AAP), respectively.
Another 42% and 32% of analysts have recommended “holds” on AAP stock and O’Reilly stock, respectively. A total of 54% of analysts have recommended “holds” on AZO stock.
Interestingly, no analysts covering ORLY have given it “sell” recommendations, while 4% and 12% of analysts have recommended “sells” on AZO and AAP, respectively.
Upside potential in 2018
As of February 20, auto parts sellers’ (FXD) 12-month target prices and upside potentials were as follows:
- AutoZone stock was trading at $713.23, and analysts gave it a target of $809.90, which reflected an upside potential of ~13.6%. Notably, analysts’ consensus target price for AZO has risen to $809.90 from $644.91 about three months ago.
- Analysts’ consensus target price for O’Reilly Automotive was $291.61, ~15.5% higher than its market price of $252.38. In January 2017, analysts’ consensus target price for ORLY was much lower at $276.83.
- Advance Auto Parts had a price target of $115.63, ~9.8% higher than its market price of $105.35.
O’Reilly Automotive released its 4Q17 earnings on February 8. Its earnings rose 12% YoY (year-over-year) and beat analysts’ estimates. The company’s gross margin remained nearly flat YoY at 52.9% in 4Q17.
AutoZone is expected to release its latest quarterly earnings on February 27, 2018.