Analyst Simeon Gutman of Morgan Stanley maintained a Hold rating on Advance Auto Parts, retaining the price target of $48.00.
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Simeon Gutman has given his Hold rating due to a combination of factors surrounding Advance Auto Parts’ current financial performance and future projections. The company has preannounced a Q2 comp range of 0% to 0.1%, which is below its peers, indicating ongoing challenges in achieving a significant topline recovery. While there is some progress in margin improvement, the lack of solid comp growth makes a full turnaround uncertain.
Gutman notes that if Advance Auto Parts can achieve its target of a 7% EBIT margin by 2027, the stock could see significant upside. However, the current market price reflects skepticism about reaching this target, as indicated by a low implied P/E multiple. With limited visibility on topline recovery and the need for substantial improvement in comps, the upside case remains difficult to justify, leading to the Hold rating.
In another report released on August 2, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $52.00 price target.
Based on the recent corporate insider activity of 89 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AAP in relation to earlier this year.