LKQ Corp (LKQ)
NASDAQ:LKQ
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LKQ
(NASDAQ:LKQ)
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Rating:68Neutral
Price Target:
$32.00
▲(9.66% Upside)
Action:ReiteratedDate:02/20/26
LKQ scores as a balanced opportunity: dependable cash flow and improving leverage are the main supports, reinforced by reasonable valuation and dividend yield. The key constraints are weakening margins and cautious 2026 outlook (tariffs, Europe softness, North America margin pressure), while technicals are only modestly supportive.
Positive Factors
Free Cash Flow Strength
Consistent, above-target free cash flow ($847M) demonstrates durable cash-generation capacity. That cash funds debt paydown, dividends, restructuring costs and share returns, reduces refinancing risk, and supports strategic optionality over the next 2–6 months and beyond.
Negative Factors
Europe Operative Weakness
Persistent Europe weakness—lower volumes, aggressive pricing and higher input costs—represents a structural regional headwind. SKU rationalization and introductory pricing will likely depress near-term revenue and margins, challenging sustainable profit recovery across the segment.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Strength
Consistent, above-target free cash flow ($847M) demonstrates durable cash-generation capacity. That cash funds debt paydown, dividends, restructuring costs and share returns, reduces refinancing risk, and supports strategic optionality over the next 2–6 months and beyond.
Read all positive factors
LKQ (LKQ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.44B
Dividend Yield4%
Average Volume (3M)2.67M
Price to Earnings (P/E)12.7
Beta (1Y)0.47
Revenue Growth-3.71%
EPS Growth-0.27%
CountryUS
Employees47,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.59
Shares Outstanding255,132,260
10 Day Avg. Volume3,561,405
30 Day Avg. Volume2,674,866
Financial Highlights & Ratios
PEG Ratio-1.20
Price to Book (P/B)1.18
Price to Sales (P/S)0.56
P/FCF Ratio9.12
Enterprise Value/Market Cap1.64
Enterprise Value/Revenue0.88
Enterprise Value/Gross Profit2.30
Enterprise Value/Ebitda8.38
Forecast
1Y Price Target
$40.38Price Target Upside38.38% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)3.04
Revenue Forecast (FY)$13.88B
LKQ Business Overview & Revenue Model
Company Description
LKQ Corporation distributes replacement parts, components, and systems used in the repair and maintenance of vehicles. It operates through three segments: North America, Europe, and Specialty. The company distributes bumper covers, automotive body...
How the Company Makes Money
LKQ makes money primarily by selling vehicle replacement parts and related services through multiple product channels. A major revenue stream comes from recycled OE parts: LKQ acquires end-of-life and salvage vehicles, dismantles them, and sells u...
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 Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Neutral
The call presented a mix of clear execution successes and persistent operating challenges. Positives include exceeding the free cash flow commitment ($847M), completing the self-service divestiture, meaningful cash returns and debt paydown, Specialty segment recovery and transaction interest, and active cost-reduction initiatives (restructuring, system integration). Offsetting these are notable weaknesses in Europe (double-digit SKU rationalization, revenue and margin declines), North America margin compression, lowered adjusted EPS versus prior year, goodwill impairment, and ongoing tariff and repairable-claims headwinds. Management provided conservative 2026 guidance, emphasizing cost control and prudence while citing early signs of demand improvement. Overall, the company demonstrated strong cash generation and disciplined capital allocation but faces meaningful near-term pressure on margins and top-line in key markets, producing a balanced outlook.Positive Updates
Exceeded Free Cash Flow Commitment
Delivered full-year free cash flow of $847,000,000 (above the $825,000,000 commitment). Q4 free cash flow was $274,000,000, driven primarily by trade working capital initiatives.
Negative Updates
Persistent Weakness in Europe
Europe organic revenue declined 5.2% (per day) in Q4 and 3.9% for full-year 2025. Europe segment EBITDA margin declined ~180 basis points to 8.3%, with gross margin down ~160 basis points due to heightened price competition and higher input costs. CEO expressed disappointment in Europe's results and noted competitive pricing pressures and weak consumer confidence.
Read all updates
Q4-2025 Updates
Positive
Negative
Exceeded Free Cash Flow Commitment
Delivered full-year free cash flow of $847,000,000 (above the $825,000,000 commitment). Q4 free cash flow was $274,000,000, driven primarily by trade working capital initiatives.
Read all positive updates
Company Guidance
LKQ guided 2026 to organic parts and services revenue growth of -0.5% to +1.5% (North America slightly positive, Europe slightly negative, Specialty closer to mid‑single digits), adjusted diluted EPS of $2.90–$3.20, and free cash flow of $708 million to $750 million; the outlook assumes tariffs in effect as of Feb 1 and that EBITDA margins will be slightly down year‑over‑year as the tariff impact annualizes. Management approved a restructuring plan expected to incur $60–$70 million of costs in 2026 to deliver more than $50 million of annualized cost savings (with over half realized in 2026), expects Q1 to be a use of cash followed by positive cash generation for the rest of the year, and is conservatively not modeling a meaningful market recovery until sustained volume improvements (while targeting Europe to return to near double‑digit EBITDA with aggressive execution).LKQ Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
68
Positive
Cash Flow
72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 13.92B | 14.36B | 13.87B | 12.79B | 13.09B |
| Gross Profit | 5.29B | 5.61B | 5.58B | 5.22B | 5.32B |
| EBITDA | 1.46B | 1.63B | 1.77B | 1.86B | 1.75B |
| Net Income | 607.00M | 690.00M | 936.00M | 1.15B | 1.09B |
Balance Sheet | |||||
| Total Assets | 15.14B | 14.96B | 15.08B | 12.04B | 12.61B |
| Cash, Cash Equivalents and Short-Term Investments | 319.00M | 234.00M | 299.00M | 278.00M | 274.00M |
| Total Debt | 5.06B | 5.61B | 5.64B | 3.94B | 4.22B |
| Total Liabilities | 8.60B | 8.92B | 8.90B | 6.55B | 6.79B |
| Stockholders Equity | 6.54B | 6.02B | 6.17B | 5.45B | 5.77B |
Cash Flow | |||||
| Free Cash Flow | 847.00M | 810.00M | 998.00M | 1.03B | 1.07B |
| Operating Cash Flow | 1.06B | 1.12B | 1.36B | 1.25B | 1.37B |
| Investing Cash Flow | 185.00M | -406.00M | -2.44B | 172.00M | -418.76M |
| Financing Cash Flow | -1.19B | -746.00M | 1.10B | -1.39B | -985.13M |
LKQ Technical Analysis
Negative
29.18
Price Trends
31.92
Negative
30.98
Negative
31.55
Negative
Market Momentum
-0.84
Negative
39.51
Neutral
79.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LKQ, the sentiment is Negative. The current price of 29.18 is below the 20-day moving average (MA) of 29.97, below the 50-day MA of 31.92, and below the 200-day MA of 31.55, indicating a bearish trend. The MACD of -0.84 indicates Negative momentum. The RSI at 39.51 is Neutral, neither overbought nor oversold. The STOCH value of 79.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
72 Outperform | $6.00B | 14.06 | 8.79% | 2.63% | -1.90% | -13.86% | |
69 Neutral | $7.66B | 9.90 | 29.57% | 2.60% | 0.84% | 26.17% | |
68 Neutral | $7.44B | 12.73 | 9.42% | 4.00% | -3.71% | -0.27% | |
65 Neutral | $3.16B | 18.56 | 14.34% | ― | 7.94% | 34.84% | |
62 Neutral | $11.23B | 35.20 | 4.80% | 1.24% | 0.08% | -83.69% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $14.29B | 101.80 | 1.78% | ― | 2.16% | -85.91% |
* Consumer Cyclical Sector Average
LKQ
LKQ
29.18
-11.83
-28.85%
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LKQ Corporate Events
Executive/Board Changes
LKQ Announces Planned Transition in Board Leadership
Neutral
Mar 6, 2026
On March 3, 2026, LKQ Corporation announced that board member Patrick Berard has chosen not to stand for re-election to the company’s Board of Directors. He will remain in his role until LKQ’s 2026 Annual Meeting of Stockholders, expec...
Business Operations and StrategyM&A Transactions
LKQ Board Initiates Strategic Alternatives Review Including Sale
Neutral
Jan 26, 2026
On January 26, 2026, LKQ Corporation announced that its board of directors has launched a comprehensive review of strategic alternatives aimed at enhancing shareholder value, including the possibility of selling the company. The board, working wit...
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.