Advance Auto Parts Faces Sales Decline Amid Economic Pressures and Uncertain Strategic Initiatives

Analyst Robert Ohmes of Bank of America Securities maintained a Sell rating on Advance Auto Parts, retaining the price target of $40.00.

Robert Ohmes has given his Sell rating due to a combination of factors impacting Advance Auto Parts. The company has experienced a notable decline in sales, with a 9.1% year-over-year decrease, primarily driven by an 11.8% drop in transactions. This decline is attributed to the volatility in the DIY segment and the financial strain on low- to middle-income consumers, who may delay vehicle repairs due to economic pressures such as the government shutdown and inflation.
Despite some progress in strategic initiatives like market hubs and a new assortment framework, the timing and impact of these efforts remain uncertain. Ohmes maintains an Underperform rating with a price objective of $40, as ongoing consumer uncertainty is expected to continue affecting sales and margins into 2026, potentially negating the benefits of the company’s initiatives. This cautious outlook reflects concerns over the company’s ability to sustain growth amidst these challenges.