UBS Reiterates Buy Rating on Advance Auto Parts (AAP) and O'Reilly Automotive (ORLY) After 66 Store Survey

UBS analyst Michael Lasser reiterated Buy ratings on Advance Auto Parts (NYSE: AAP) and O'Reilly Automotive (NASDAQ: ORLY) after surveying 66 auto repair shops and seeing steady DIFM trends.

The analyst stated "42% of shops noted that business was up (vs. 62% in Sep. 21 and 38% Mar '21). Also, only 23% noted business was down YoY, which compares to 18% in Sep. 21 and 35% in Mar'21). There was a 1,300 bps positive spread over the % of repair shops who indicated that business was up 5% vs. those that said business was down 5%. In the past, when this spread has been triple digits, it’s marked a period of definitive strength in the commercial segment of the aftermarket. We think that has been the case as of late. Respondents in the Southeast and Northeast indicated that they are seeing the strongest trends. Further, the survey showed that eCommerce penetration in this segment remains limited. Only 8% of respondents reported using Amazon (NASDAQ: AMZN) "often" (in-line w. last survey) and shops largely report "rarely" or "never" using other online-only suppliers such as CARiD, Carparts.com, RockAuto or Parts Geek. In sum, we believe that the data indicates demand in the commercial segment remains healthy."

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 $218.39 yesterday.

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