Zacks Investment Research Downgrades Advance Auto Parts (AAP) to Hold

Advance Auto Parts (NYSE:AAP) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a report released on Friday.

According to Zacks, “In third-quarter 2018, Advance Auto Parts’ earnings and revenues came in higher than both the Zacks Consensus Estimate and the year-ago quarter figure. However, new store openings, acquisitions and investments are leading to increased capital expenses of the company. Moreover, price competition with peers and dependence on seasonality and weather conditions are concerns for the company. However, to meet the evolving need of the customers, Advance Auto Parts is streamlining its supply chain and is opting for store transformation and inventory positioning. Also, the company is undertaking five-year strategy by constructing a productivity pipeline for the future.”

A number of other equities research analysts also recently commented on AAP. Deutsche Bank set a $205.00 target price on Advance Auto Parts and gave the company a “buy” rating in a report on Wednesday. Credit Suisse Group set a $195.00 target price on Advance Auto Parts and gave the company a “buy” rating in a report on Wednesday. UBS Group raised their target price on Advance Auto Parts from $190.00 to $215.00 and gave the company a “buy” rating in a report on Wednesday. Bank of America raised their target price on Advance Auto Parts from $177.00 to $200.00 and gave the company a “neutral” rating in a report on Wednesday. Finally, JPMorgan Chase & Co. raised their target price on Advance Auto Parts from $220.00 to $222.00 and gave the company an “overweight” rating in a report on Wednesday. Eight research analysts have rated the stock with a hold rating and eleven have issued a buy rating to the stock. The stock has a consensus rating of “Buy” and a consensus price target of $176.65.

Advance Auto Parts stock opened at $179.05 on Friday. Advance Auto Parts has a one year low of $88.24 and a one year high of $186.15. The company has a debt-to-equity ratio of 0.29, a current ratio of 1.62 and a quick ratio of 0.48. The firm has a market capitalization of $13.68 billion, a price-to-earnings ratio of 33.34, a price-to-earnings-growth ratio of 2.13 and a beta of 1.04.

Advance Auto Parts (NYSE:AAP) last released its earnings results on Tuesday, November 13th. The company reported $1.89 EPS for the quarter, beating analysts’ consensus estimates of $1.75 by $0.14. Advance Auto Parts had a return on equity of 13.99% and a net margin of 5.83%. The company had revenue of $2.28 billion during the quarter, compared to the consensus estimate of $2.23 billion. During the same quarter last year, the company earned $1.43 earnings per share. Advance Auto Parts’s quarterly revenue was up 4.3% compared to the same quarter last year. On average, analysts predict that Advance Auto Parts will post 7.09 earnings per share for the current year.

Advance Auto Parts declared that its board has initiated a stock repurchase program on Tuesday, August 14th that permits the company to buyback $600.00 million in shares. This buyback authorization permits the company to reacquire up to 5.5% of its shares through open market purchases. Shares buyback programs are often a sign that the company’s leadership believes its stock is undervalued.

Institutional investors have recently bought and sold shares of the stock. Piedmont Investment Advisors LLC purchased a new stake in Advance Auto Parts during the 2nd quarter worth about $116,000. Tower Research Capital LLC TRC purchased a new stake in Advance Auto Parts during the 2nd quarter worth about $117,000. Federated Investors Inc. PA purchased a new stake in Advance Auto Parts during the 2nd quarter worth about $124,000. First Mercantile Trust Co. purchased a new stake in Advance Auto Parts during the 2nd quarter worth about $162,000. Finally, NINE MASTS CAPITAL Ltd purchased a new stake in Advance Auto Parts during the 3rd quarter worth about $164,000.

About Advance Auto Parts

Advance Auto Parts, Inc provides automotive replacement parts, batteries, accessories, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. It offers battery accessories, belts and hoses, brakes and brake pads, chassis and climate control parts, clutches and drive shafts, engines and engine parts, exhaust systems and parts, hub assemblies, ignition components and wires, radiators and cooling parts, starters and alternators, and steering and alignment parts.

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