Advance Auto Parts: Modest Growth and Margin Constraints Justify Neutral Hold Rating

UBS analyst Michael Lasser maintained a Hold rating on Advance Auto Parts today and set a price target of $65.00.

Michael Lasser has given his Hold rating due to a combination of factors tied to Advance Auto Parts’ current execution and future outlook. He expects the company to show only modest same-store sales growth in the near term, roughly in line with recent quarters, reflecting steady but not standout demand across both commercial and DIY channels.

At the same time, he sees room for some margin improvement from initiatives in sourcing, supply chain, and cost allocation, but believes rising labor and benefit costs will limit upside. He also views the market’s skepticism about AAP reaching its 7% EBIT margin target by 2027 as justified, anticipating that management may need to reset and extend its goals, which tempers the risk‑reward profile and supports a neutral, Hold stance.

In another report released today, J.P. Morgan also maintained a Hold rating on the stock with a $61.00 price target.

Based on the recent corporate insider activity of 80 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.