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LKQ
(NASDAQ:LKQ)
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Rating:53Neutral
Price Target:
$26.00
▲(0.70% Upside)
Action:Reiterated
Date:07/31/26
LKQ scores lower primarily due to deteriorating fundamentals (slowing revenue, compressed margins, weaker cash flow) and a bearish technical setup with the stock trading below all key moving averages. The earnings call reinforced near-term risk via reduced 2026 EPS/FCF guidance and significant Europe ERP disruption. Offsetting these negatives, valuation is comparatively supportive with a moderate P/E and a high dividend yield.
Positive Factors
Alternative Parts and Private Label Adoption
Higher alternative-part and private-label penetration can strengthen LKQ’s value proposition, improve sourcing differentiation and support margins. These trends deepen customer adoption while reducing reliance on new OEM components over the medium term.
Negative Factors
European ERP Disruption and Customer Losses
The German ERP rollout caused service failures, lower fill rates and customer share-of-wallet losses, creating more than a temporary earnings issue. Recovery depends on restoring service reliability and customer confidence while absorbing ongoing implementation costs.
Read all positive and negative factors
Positive Factors
Negative Factors
Alternative Parts and Private Label Adoption
Higher alternative-part and private-label penetration can strengthen LKQ’s value proposition, improve sourcing differentiation and support margins. These trends deepen customer adoption while reducing reliance on new OEM components over the medium term.
Read all positive factors
LKQ Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where LKQ is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where LKQ is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyLKQ (LKQ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.54B
Dividend Yield4.62%
Average Volume (3M)2.59M
Price to Earnings (P/E)14.4
Beta (1Y)0.57
Revenue Growth-2.55%
EPS Growth-33.32%
CountryUS
Employees44,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)1.80
Shares Outstanding253,002,090
10 Day Avg. Volume2,660,695
30 Day Avg. Volume2,589,468
Financial Highlights & Ratios
PEG Ratio-1.21
Price to Book (P/B)1.18
Price to Sales (P/S)0.56
P/FCF Ratio9.12
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$32.36Price Target Upside25.32% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)2.73
Revenue Forecast (FY)$13.66B
LKQ Business Overview & Revenue Model
Company Description
LKQ Corporation, established in 1998 and headquartered in Chicago, Illinois, specializes in distributing replacement parts and systems essential for vehicle repair and maintenance. Its operations are structured across three primary segments: North...
How the Company Makes Money
LKQ makes money primarily by sourcing vehicle parts and selling them through distribution networks to professional repair channels. A major revenue stream comes from recycled OEM (original equipment manufacturer) parts: LKQ acquires salvage vehicl...
LKQ Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Neutral
The call presents a balanced picture: encouraging operational signs in North America (first organic growth in nine quarters), strong specialty revenue performance, rising alternative part and private label penetration, and meaningful cost/productivity actions in Europe. However, a material Europe setback driven by the ERP conversion in Germany (estimated ~$140M revenue and ~$50M EBITDA impact), continued softness in the U.K. and Benelux, reduced full-year guidance for EPS and free cash flow, and a negative H1 free cash flow result temper near-term outlook. Management has recovery plans, improved system stability, and remains focused on long-term strategic benefits from the ERP, but the scale of European disruption and guidance cuts offset many of the positive developments.Positive Updates
North America Returns to Organic Growth
North America organic revenue increased 0.5% in Q2 (first quarter of growth in nine quarters). Aftermarket collision revenue rose ~2%, Canadian hard parts grew mid-single digits, salvage gross margin exceeded expectations, and fill rates showed sequential improvement. North America segment EBITDA was $207 million with a 14.1% margin (underlying performance in the high-14% range excluding a $10 million one-time legal reserve).
Negative Updates
Europe Organic Revenue Decline and ERP Disruption
Europe parts & services organic revenue declined 12.6% in Q2. Management estimates the ERP conversion in Germany reduced revenue by ~ $140 million during the quarter and decreased Europe EBITDA by ~ $50 million. Europe segment EBITDA totaled $109 million (down ~$42 million year-over-year) with a 7.5% margin.
Read all updates
Q2-2026 Updates
Positive
Negative
North America Returns to Organic Growth
North America organic revenue increased 0.5% in Q2 (first quarter of growth in nine quarters). Aftermarket collision revenue rose ~2%, Canadian hard parts grew mid-single digits, salvage gross margin exceeded expectations, and fill rates showed sequential improvement. North America segment EBITDA was $207 million with a 14.1% margin (underlying performance in the high-14% range excluding a $10 million one-time legal reserve).
Read all positive updates
Company Guidance
LKQ revised its 2026 guidance, now expecting organic parts & services revenue down 1% to 3%, adjusted diluted EPS of $2.60–$2.90 (previously $2.90–$3.20) and full‑year free cash flow of $625M–$775M (previously $700M–$850M); the outlook assumes repairable claims remain near current levels with modest improvement, continued but measured service recovery in the German operations, and soft conditions in the U.K. and Benelux. For context, Q2 revenue was about $3.4B (vs. $3.5B LY), GAAP diluted EPS $0.52 and adjusted EPS $0.67 (vs. $0.84 LY), Q2 operating cash flow $111M and free cash flow $60M (first‑half OCF $55M, FCF -$36M), total liquidity $1.9B and net leverage 2.8x EBITDA; the company returned $129M to shareholders and prepaid a $500M term loan in July. Segment metrics cited as supporting the outlook include North America organic +0.5% (Q2), NA EBITDA $207M and 14.1% margin (including a $10M legal reserve that shaved ~70 bps), Europe organic -12.6% (Q2) with an estimated ERP-related revenue impact of ~$140M and an ERP EBITDA drag of ~$50M (Europe EBITDA $109M, 7.5% margin), and Specialty organic +4.5% with $33M EBITDA (6.7% margin).LKQ Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
63
Positive
Cash Flow
54
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 13.69B | 13.92B | 14.36B | 13.87B | 12.79B | 13.09B |
| Gross Profit | 5.16B | 5.29B | 5.61B | 5.58B | 5.22B | 5.32B |
| EBITDA | 1.26B | 1.46B | 1.63B | 1.77B | 1.86B | 1.75B |
| Net Income | 461.00M | 607.00M | 690.00M | 936.00M | 1.15B | 1.09B |
Balance Sheet | ||||||
| Total Assets | 15.03B | 15.14B | 14.96B | 15.08B | 12.04B | 12.61B |
| Cash, Cash Equivalents and Short-Term Investments | 301.00M | 319.00M | 234.00M | 299.00M | 278.00M | 274.00M |
| Total Debt | 5.31B | 5.06B | 5.61B | 5.64B | 3.94B | 4.22B |
| Total Liabilities | 8.58B | 8.60B | 8.92B | 8.90B | 6.55B | 6.79B |
| Stockholders Equity | 6.45B | 6.54B | 6.02B | 6.17B | 5.45B | 5.77B |
Cash Flow | ||||||
| Free Cash Flow | 625.00M | 847.00M | 810.00M | 998.00M | 1.03B | 1.07B |
| Operating Cash Flow | 825.00M | 1.06B | 1.12B | 1.36B | 1.25B | 1.37B |
| Investing Cash Flow | 164.00M | 185.00M | -406.00M | -2.44B | 172.00M | -418.76M |
| Financing Cash Flow | -971.00M | -1.19B | -746.00M | 1.10B | -1.39B | -985.13M |
LKQ Technical Analysis
Positive
25.82
Price Trends
25.11
Positive
26.43
Negative
28.35
Negative
Market Momentum
0.09
Negative
59.09
Neutral
70.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LKQ, the sentiment is Positive. The current price of 25.82 is above the 20-day moving average (MA) of 24.64, above the 50-day MA of 25.11, and below the 200-day MA of 28.35, indicating a neutral trend. The MACD of 0.09 indicates Negative momentum. The RSI at 59.09 is Neutral, neither overbought nor oversold. The STOCH value of 70.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LKQ.
LKQ Risk Analysis
LKQ disclosed 38 risk factors in its most recent earnings report. LKQ reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
LKQ Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $8.95B | 14.27 | 25.10% | 2.94% | 5.89% | -7.00% | |
68 Neutral | $13.49B | 32.40 | 7.37% | 1.06% | 2.17% | 111.19% | |
67 Neutral | $6.12B | 11.65 | 10.90% | 2.14% | 3.55% | 25.67% | |
66 Neutral | $3.98B | 18.10 | 14.76% | ― | 3.30% | -1.80% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
53 Neutral | $6.54B | 14.43 | 7.09% | 4.65% | -2.55% | -33.32% | |
53 Neutral | $10.16B | 44.79 | 2.41% | ― | 5.20% | -71.83% |
* Consumer Cyclical Sector Average
LKQ
LKQ
25.77
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.