Nomura Securities Maintains a 'Neutral' on Advance Auto Parts (AAP); Cutting Numbers As Trends Turn Sluggish

Nomura Securities maintains a 'Neutral' on Advance Auto Parts (NYSE: AAP) price target of $72.00.

Analyst, Aram Rubinson, said, "Advance Auto Parts will report Q2 EPS on August 9. Our Q2 estimate is unchanged, but we are lowering our Q3 and full-year estimates to reflect continued sluggish trends in the industry and the fact that AAP continues to under-punch its weight, in our view. Our FY12 estimate is 8% below consensus and 8% below the midpoint of guidance. We continue to hear that trends are still challenging.AAP has an uncharacteristically tough comparison brewing in Q3. AAP has historically under-comped ORLY by 1.2% and 1.5% on a 1- and 2-year basis. Our new Q3 estimate assumes a gap of (4.0%) and (6.6%). AAP also faces an SG&A hurdle as $13m of cost were deferred into Q2 from Q1. We do not see enough downside to revisit a Reduce rating at current valuation."

F12E EPS from $5.32 to $5.20; F13E EPS from $5.90 to $5.77.

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 $68.06 yesterday.

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