Barclays Reiterates an 'Overweight' on O'Reilly Automotive (ORLY); Strong 3Q Comps Expected as Fundamentals Continue Favorable Trend

Barclays reiterates an 'Overweight' on O'Reilly Automotive (NASDAQ: ORLY) price target of $80.00.

Barclays analyst says, "EPS growth led by expense leverage; expect solid comps: Our 3Q11 EPS estimate of $1.02 is at the high end of guidance of $0.98-$1.02 and above the Street's estimate of $1.00. We estimate EBIT margin increased 113 bps, due to 86 bps of SG&A leverage, and 27 bps of gross margin improvement. We estimate overall comps of 4%, vs. a tough 11.1% in 3Q10, as we believe moderating gas prices throughout most of the quarter helped drive sales. Going forward, compares moderate."

"Reiterate Top Pick on growth prospects and fundamentals: We favorably view the shift to increasing productivity, following the CSK integration. With increasing cash flow as a result of substantial operational strength, ORLY will likely be increasingly focused on enhancing shareholder value with sustained buybacks going forward. With ORLY's low degree of cyclicality and low relative exposure to 4Q, we continue to endorse this stock, given its relative defensiveness."

For more ratings news on O'Reilly Automotive click here and for the rating history of O'Reilly Automotive click here.

Shares of O'Reilly Automotive closed at $70.42 yesterday.

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