William Blair analyst Phillip Blee has maintained their bullish stance on ORLY stock, giving a Buy rating yesterday.
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Phillip Blee has given his Buy rating due to a combination of factors that highlight O’Reilly Auto’s strong performance and potential for growth. The company reported a better-than-expected increase in second-quarter comparable store sales, which rose by 4.1%, surpassing the consensus estimate of 3.8%. This growth was driven primarily by the professional segment, which saw a significant acceleration, suggesting that O’Reilly is capturing market share from competitors like Advance Auto. Additionally, the gross margin improved by 65 basis points year-over-year, exceeding expectations and indicating efficient cost management.
Despite concerns over elevated SG&A growth, which increased by 4.7% per store and surpassed management’s full-year outlook, O’Reilly’s EPS grew by 11% year-over-year, aligning with forecasts. The EBIT margin remained stable compared to the previous year, although slightly below the Street’s estimate. These financial metrics, coupled with the company’s ability to maintain positive DIY comps for the third consecutive quarter, suggest a resilient business model. Therefore, Phillip Blee sees potential for continued growth and market strength, justifying the Buy rating.
In another report released yesterday, Roth MKM also reiterated a Buy rating on the stock with a $96.00 price target.
Based on the recent corporate insider activity of 73 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 ORLY in relation to earlier this year.