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Most Analysts Recommend a ‘Buy’ for Advance Auto Parts Stock

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Nov. 20 2020, Updated 5:27 p.m. ET

Wall Street analysts on AAP

According to the latest data compiled by Reuters, 54% of the 24 analysts covering Advance Auto Parts (AAP) have recommended a “buy” for the stock. About 38% of them have recommended a “hold,” and the remaining 8% have given it a “sell.”

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Consensus target price

According to consensus data, AAP stock has a potential to reach $124.39 in the next 12 months. That target doesn’t reflect any major upside potential and was already lower than its market price of $125.17 as of May 24.

Interestingly, there have been no major changes recently in analysts’ ratings for AAP stock. However, analysts’ consensus price target for the stock has risen slightly to $124 from $121 about a week ago.

Analysts’ consensus about six months ago suggested a much lower target price of $107 for AAP stock. Despite its declining sales trend, Advance Auto Parts’ profit margin recovery in the first quarter could be one of the reasons a majority of analysts are still suggesting a “buy” for the stock.

Investors typically pay attention to Wall Street analysts’ take on a company since their views could have an impact on the stock. If popular analysts change their ratings, a significant short-term movement in the stock could follow.

Recommendations for peers

Let’s look at analysts’ consensus “buy” recommendations for other auto parts sellers and one automaker giant (XLY) and their 12-month stock price targets.

  • About 46% of analysts have given AutoZone (AZO) a “buy” with a 17% upside potential.
  • About 68% of analysts have given O’Reilly Automotive (ORLY) a “buy” with an 8% upside potential.
  • About 50% of analysts have given General Motors (GM), the largest US automaker, a “buy” with a 26% upside potential.

Be sure to visit Market Realist’s autos page to stay updated on the latest updates for the auto industry.

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