O'Reilly Automotive (ORLY) PT Raised to $1,580 at UBS

UBS analyst Michael Lasser raised the price target on O'Reilly Automotive (NASDAQ: ORLY) to $1,580.00 (from $1,535.00) while maintaining a Buy rating.

The analyst commented, "While there are certainly points to pick at in ORLY's 1Q'25 report, there's also a good chance that consensus estimates move higher rather than lower following the print. Besides, the operating income shortfall in 1Q ($741mm actual versus the $788mm consensus forecast) was largely caused by higher than forecast SG&A ($1,380mm versus the $1,354mm consensus forecast). This will probably be explained by some front-loading of investment spending and potentially related to growing accruals for liability claims (which it also cited in 4Q'24). Other retailers have cited this recently such as WMT (both it and ORLY use Ernst & Young as their auditor)…Most importantly, the company's comp was good. The 3.6% increase nicely exceeded our 3.5% forecast and the 2.7% consensus. Plus, we think it outshined the market's bar of 2.5% to 3.5% (based on our conversations). It's probably going to stand strong against most retailers in 1Q (outside of COST). The company noted that its comp was driven by a mid-single digit commercial increase and a low-single digit DIY increase. Both segments are poised to accelerate not only as ORLY's share gains increase in the wake of AAP store closures, but also due to some price increases on the heels of tariffs."

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