Analyst Gary Prestopino from Barrington maintained a Buy rating on LKQ and decreased the price target to $42.50 from $60.00.
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Gary Prestopino has given his Buy rating due to a combination of factors that highlight LKQ’s strategic initiatives and financial outlook. LKQ Corporation focuses on operational excellence and maximizing shareholder returns by simplifying its business operations. This includes optimizing inventory, increasing private label penetration, and rationalizing its geographic footprint. The pending sale of the Self-Service business for $410 million is expected to enhance the company’s stock valuation by reducing cyclicality and commodity price impacts, while also aiding in debt reduction.
Despite a slight decline in Q2/25 financial results, which were attributed to macroeconomic factors, LKQ’s North American segment outperformed the market. The company has been proactive in managing its cost structure, successfully removing $125 million in expenses over the past year, with further reductions planned, particularly in Europe. Although guidance ranges for organic parts and services revenue growth and adjusted EPS have been reduced, the expectation is that LKQ will demonstrate significant operating leverage once market conditions improve. This strategic positioning supports the OUTPERFORM rating with a price target range of $40-45.