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A Look at Analysts’ Views on Auto Parts Sellers in September

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Auto parts retailers’ stocks

According to Reuters, as of September 20, ~50%, 65%, and 54% of analysts have given “buy” recommendations to AutoZone (AZO), O’Reilly Automotive (ORLY), and Advance Auto Parts (AAP), respectively.

Another 46%, 35%, and 46% of analysts have recommended “holds” on AZO, ORLY, and AAP, respectively.

No analysts covering ORLY or AAP have given them “sell” recommendations, while 4% of analysts have recommended “sells” on AutoZone.

Earnings highlights

AutoZone released its earnings for the fiscal fourth quarter of 2018 on September 18. The company reported a 21.4% YoY (year-over-year) rise in its earnings for the quarter to $18.54 per share. AZO’s fiscal fourth quarter covered the 16 weeks that ended on August 25. In the fourth quarter, the company’s revenue stood at $3.56 billion, up 1.3%, and its comp sales rose 2.2%.

In the second quarter, O’Reilly Automotive’s earnings rose 41% YoY (year-over-year) and also beat analysts’ estimates. The company’s comparable store sales also improved 4.6%. Likewise, Advance Auto Parts’ second-quarter adjusted earnings rose 25% YoY.

As of September 20, auto parts sellers’ (XLY) 12-month price targets and upside potentials are as follows:

  • AutoZone’s stock price target is $795.17, a 4% potential upside from its market price of $761.91. Analysts’ consensus target price for AZO has risen to near $795 in September from near $766 in August.
  • O’Reilly Automotive’s price target is $334.05, 3% lower than its market price of $344.54.
  • Advance Auto Parts’ price target is $168.06, ~1% lower than its market price of $169.55.

Auto industry

In the first week of September, Tesla (TSLA) CEO Elon Musk was seen “smoking marijuana on a live web show with comedian Joe Rogan.” After this, a Nomura Instinet analyst called Tesla stock “no longer investable.”

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