Cautious Outlook on Advance Auto Parts: Hold Rating Amid Strategic Gains and Growth Challenges

Analyst Simeon Gutman from Morgan Stanley maintained a Hold rating on Advance Auto Parts (AAP – Research Report) and increased the price target to $48.00 from $45.00.

Simeon Gutman has given his Hold rating due to a combination of factors influencing Advance Auto Parts’ current and future performance. The company has shown promising results in its strategic initiatives, surpassing expectations with its Q1’25 performance. However, the stock is trading close to the revised price target of $48, indicating limited immediate upside potential.
Despite the positive strides, there are concerns about the company’s ability to achieve sustained comparable sales growth, especially given the ongoing challenges faced by the DIY consumer segment and tariff-related pressures. Additionally, while price investments are expected to stabilize by the second half of 2025, the limited momentum in topline growth could impede further recovery in EBIT margins. These factors contribute to a cautious outlook, justifying the Hold rating.

In another report released yesterday, TD Cowen also maintained a Hold rating on the stock with a $53.00 price target.

Based on the recent corporate insider activity of 89 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of AAP in relation to earlier this year.