William Blair analyst Phillip Blee has maintained their neutral stance on AAP stock, giving a Hold rating today.
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Phillip Blee’s rating is based on a combination of factors that reflect both positive trends and ongoing challenges for Advance Auto Parts. The company reported better-than-expected second-quarter results, with sales and earnings per share exceeding consensus estimates. However, the gross margin fell short of expectations, and the company lowered its EPS outlook for the year due to increased interest expenses from recent debt offerings.
Despite some encouraging signs, such as growth in pro-related sales and improving demand trends, Blee remains cautious. The stock’s valuation at 20.6 times the revised 2026 EPS estimate suggests that more substantial progress in gross margin expansion and stable comparable sales growth is needed before a more optimistic rating can be justified. While management’s turnaround efforts show promise, execution on gross margin improvements remains a critical factor with limited visibility at this time.
Blee covers the Consumer Cyclical sector, focusing on stocks such as Advance Auto Parts, Floor & Decor Holdings, and Yeti Holdings. According to TipRanks, Blee has an average return of 15.9% and a 69.81% success rate on recommended stocks.
In another report released today, D.A. Davidson also reiterated a Hold rating on the stock with a $63.00 price target.