Advance Auto Parts Inc Stock Forecast:
According to 19 analysts who have forecasted the performance of Advance Auto Parts Inc‘s stock, the average price target for the company over the next 12 months is USD 165.62. The average analyst rating for the stock is “Hold”. Stock Target Advisor has conducted its own analysis and has found that the company’s stock is “Slightly Bearish” based on 5 positive signals and 11 negative signals. The stock’s closing price was USD 144.96, which represents a change of +0.53% over the past week, -1.68% over the past month, and -29.11% over the past year.
Analysts Coverage Change:
- Raymond James maintains a Strong Buy rating on Advanced Auto Parts and lowers the price target to $180 from $200.
- Citigroup maintains a Neutral rating and lowers the price target to $153 from $159.
- Morgan Stanley & Co. maintains an Equal-Weight rating and lowers the price target to $155 from $165.
Advanced Auto Parts Inc News:
Advance Auto Parts Inc (AAP:NYE) reported strong fourth-quarter FY22 sales growth of 3.2% year-on-year, with revenue reaching $2.47 billion, beating the consensus of $2.42 billion. This growth was driven by strategic pricing and new store openings, with comparable store sales also increasing by 2.1%.
Despite a contraction in gross margin by 60-basis points to 44.1%, gross profit still rose by 1.7% to $1.1 billion. Operating margin was 5.3%, and operating income for the quarter grew by 17.4% to $132 million. The company had $269.3 million in cash and equivalents as of Dec. 31, 2022, and cash provided by operating activities for the year totaled $722.22 million. At the end of Q4, Advance Auto Parts had $947.3 million remaining under the share repurchase program.
Although CEO Tom Greco has announced his plan to retire at the end of the year, he remains optimistic about the company’s future. Greco stated, “We expect to see further improvements in inventory availability throughout 2023, which we view as the single most important driver to accelerate topline growth.”
Advance Auto Parts expects FY23 revenue of $11.4 billion to $11.6 billion, higher than the consensus of $11.33 billion. However, the company expects FY23 EPS of $10.20 to $11.20, lower than the Street view of $12.53.
Overall, Advance Auto Parts Inc’s strong Q4 performance and positive outlook for FY23 demonstrate the company’s ability to navigate challenging market conditions and maintain its position as a leading automotive aftermarket retailer.
Positive Fundamentals:
Advanced Auto Parts is a large and stable company with high market capitalization. The stock’s annual returns are consistently stable, with low volatility compared to its peers.
Additionally, the company has had positive total cash flow and total free cash flow in the most recent four quarters. Furthermore, it has shown superior dividend growth compared to its sector over the previous five years.
Negative Fundamentals:
Advance Auto Parts stock is currently not favored due to poor risk-adjusted returns and underperformance compared to peers in terms of total returns, dividend returns, return on equity, capital utilization, and return on assets. The stock is also considered overpriced compared to earnings, cash flow, and free cash flow.
Additionally, the company has shown below median earnings and revenue growth in the previous five years compared to its sector. Therefore, caution is advised when considering buying this stock.
FA Score (Fundamental Analysis):
The fundamental analysis of Advanced Auto Parts is “Slightly Bearish” with a FA score of 3.1 out of 10, where 0 is very bearish and 10 is very bullish.
