Sterne Agee CRT Raises Price Target on LKQ Corporation (LKQ) Following Rhiag Acquisition

Sterne Agee CRT reiterated a Buy rating on LKQ Corporation (NASDAQ: LKQ), and raised the price target to $40.00 (from $38.00), following the closing of the Rhiag acquisition. LKQ increased 2016/2017 operating-adjusted EPS estimates to $1.77/$2.05 from $1.67/$1.91. However, due to the late 1Q16 closing, first quarter EPS estimates are unchanged, with the accretion spread over the subsequent 3 quarters.

Analyst Ali Faghri commented, "We are raising our 2016/2017 operating-adjusted EPS estimates to $1.77/$2.05 from $1.67/$1.91 to reflect the closing of the Rhiag acquisition and increasing our price target to $40. LKQ remains one of our top ideas and our Buy rating is based on: (1) sustained mid-single digit NA organic growth supported by a favorable collision backdrop (rising miles traveled, growing vehicle parc, expanding collision ages 3-8 'sweet spot'), (2) significant European expansion opportunities given low alternative parts penetration, (3) further margin expansion through recent company initiatives in NA and increased scale in Europe, (4) moderating headwinds from lower scrap prices (see pg. 2) and FX translation driving improved profitability."

For an analyst ratings summary and ratings history on LKQ Corp. click here. For more ratings news on LKQ Corp. click here.

Shares of LKQ Corp. closed at $31.36 yesterday.

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