UBS Maintains a 'Neutral' on Advance Auto Parts (AAP); Q2: Big EPS Beat, Though Questions Linger
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Price: $84.08 -2%
Rating Summary:
2 Buy, 14 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 21 | Down: 24 | New: 29
Rating Summary:
2 Buy, 14 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 21 | Down: 24 | New: 29
Trade AAP Now!
UBS maintains a 'Neutral' on Advance Auto Parts (NYSE: AAP), raises price target from $55 to $59.
UBS analyst says, "Following its results and conference call, the consensus estimates for AAP are likely moving higher. Given the low expectations heading into the release, we think this upward trajectory is all that really matters for the stock in the near term. But, we think that the risk profile for the forecasts has increased on the heels of the moving pieces from 2Q...Gross margin element to the story has gone away for the near term."
"AAP is pulling the cost lever, but will some unintended risks arise?: On its surface, the 138 bps of SGA leverage shows that AAP has the ability to profitably scale its business. Though, we have yet to see what the sustainable leverage point is for the model since this quarter was heavily impacted by opaque factors like lowering incentive comp and reducing store hours..." (UBS lowers FY11 EPS estimate from $4.63 to $4.61, but raises FY12 from $5.09 to $5.10)
For more ratings news on Advance Auto Parts click here and for the rating history of Advance Auto Parts click here.
Shares of Advance Auto Parts closed at $54.29 yesterday, with a 52 week range of $49.50-$72.32.
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UBS analyst says, "Following its results and conference call, the consensus estimates for AAP are likely moving higher. Given the low expectations heading into the release, we think this upward trajectory is all that really matters for the stock in the near term. But, we think that the risk profile for the forecasts has increased on the heels of the moving pieces from 2Q...Gross margin element to the story has gone away for the near term."
"AAP is pulling the cost lever, but will some unintended risks arise?: On its surface, the 138 bps of SGA leverage shows that AAP has the ability to profitably scale its business. Though, we have yet to see what the sustainable leverage point is for the model since this quarter was heavily impacted by opaque factors like lowering incentive comp and reducing store hours..." (UBS lowers FY11 EPS estimate from $4.63 to $4.61, but raises FY12 from $5.09 to $5.10)
For more ratings news on Advance Auto Parts click here and for the rating history of Advance Auto Parts click here.
Shares of Advance Auto Parts closed at $54.29 yesterday, with a 52 week range of $49.50-$72.32.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
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