O’Reilly Auto’s Strong Growth Potential and Strategic Expansion Justify Buy Rating

Analyst Robert Ohmes of Bank of America Securities reiterated a Buy rating on O’Reilly Auto (ORLY – Research Report), retaining the price target of $1,600.00.

Robert Ohmes has given his Buy rating due to a combination of factors that highlight O’Reilly Auto’s strong growth potential. The company reported a comparable sales growth of 3.6% in the first quarter, surpassing market expectations, driven by increases in both professional and DIY segments. This growth, alongside the opening of 38 new stores, underscores O’Reilly’s ability to expand its market share through strategic store expansion.
Despite facing some pressure from SG&A deleverage, O’Reilly Auto has shown resilience by raising its full-year EPS guidance, aided by a lower tax rate. The company’s ability to manage tariff exposures and maintain margin rates through vendor negotiations and pricing strategies further supports its robust financial health. Additionally, O’Reilly’s international expansion opportunities and efficient supply chain network contribute to a positive long-term growth outlook, reinforcing the Buy rating with a price objective of $1,600.

Ohmes covers the Consumer Cyclical sector, focusing on stocks such as O’Reilly Auto, Costco, and AutoZone. According to TipRanks, Ohmes has an average return of 9.8% and a 59.67% success rate on recommended stocks.