Morgan Stanley Reiterates Overweight on Advance Auto Parts (AAP) Following 2Q
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Morgan Stanley reiterates an Overweight rating and $180.00 price target on Advance Auto Parts (NYSE: AAP) following the company's 2Q earnings report. While Q2 was a poor quarter, Morgan Stanley believes that it is too early to discredit the turnaround story.
Analyst Simeon Gutman commented, "Comps of -4.1% were “in-line” with the midpoint of guidance (-5% to -3%) and while slightly better than consensus (-4.5%), the bulls were hoping comps would be a shade better. Margin deleverage was also worse than expected with GM down 110bps and SG&A up ~15 bps. For the stock to have held onto its recent gains, the quarter needed to demonstrate sequential top-line progress with at least in-line margins. Q2 was a setback in this regard."
Shares of Advance Auto Parts closed at $158.05 yesterday.
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