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UPDATE: MKM Partners Starts Advance Auto Parts (AAP) at Buy

June 22, 2022 4:25 PM EDT
Get Alerts AAP Hot Sheet
Price: $191.77 -1.3%

Rating Summary:
    20 Buy, 17 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 8 | Down: 42 | New: 10
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(Updated - June 22, 2022 4:46 PM EDT)

MKM Partners analyst David Bellinger initiates coverage on Advance Auto Parts (NYSE: AAP) with a Buy rating and a price target of $195.00.

The analyst comments "Consistent sales and margin expansion have not come easy for Advance Auto Parts in recent years. Management has had ample time to implement wholesale change and arguably should be at higher operating margins already. Even still, we see the current path toward better profitability emerging and more visible than ever before. The benefits from improved parts availability, more closely aligning inventory movement across banners, pushing more out of the DieHard brand, and other internal initiatives are now coming together amid a renewed push toward unit expansion. The pillars of operating margin improvement appear achievable to us amid a favorable sales backdrop, and still leave a wide performance gap vs. auto parts peers. Advance Auto Parts represents our more speculative call within the group with what we see as the most torque or upside in a best-case scenario given a muted valuation. The company also serves an earnest inflation hedge with a favorable risk reward skew from here, in our view."

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 $171.73 yesterday.


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