UBS Maintains a 'Buy' on Advance Auto Parts (AAP); Adjusting Estimates & PT As Many Questions Still Loom

May 18, 2012 1:19 PM EDT
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Price: $173.00 -1.02%

Rating Summary:
    15 Buy, 15 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 35 | Down: 31 | New: 11
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UBS maintains a 'Buy' on Advance Auto Parts (NYSE: AAP) price target lowered from $100 to $91.

Analyst, Michael Lasser, said, "On the heels of AAP’s 1Q’12 results (& O'Reilly's (Nasdaq: ORLY)), the key question is this the beginning of an extended soft patch or a temporary setback due to an unusually warm winter? The answer is unknowable at this point, but we are inclined to believe it is more of a momentary blip since it has occurred across both segments of the industry & both retailers that have reported (we suspect it will be in AutoZone's (NYSE: AZO) upcoming results). In our view, these conditions have most likely created a chance to buy a good business at an inexpensive valuation."

Lasser think shares appear cheap, but the company's share buyback plan was supposed to be an additional catalyst, however, AAP didn't purchase shares in Q1 (Why?). Lasser lowers FY12 EPS estimate from $5.88 to $5.80, but raises FY13 from $6.68 to $6.75.

For an analyst ratings summary and ratings history on Advance Auto Parts click here. For more ratings news on Advance Auto Parts click here.

Shares of Advance Auto Parts closed at $68.17 yesterday.

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