CFRA Downgrades Advance Auto Parts (AAP) to Sell
CFRA analyst Garrett Nelson downgraded Advance Auto Parts (NYSE: AAP) from Hold to Sell.
The analyst commented: "We cut our 12-month target price to $25 from $55, based on a 2025 P/E of 17.9x, in line with historic multiples. We lower our EPS estimates to $0.10 from $2.30 for 2024 and to $1.40 from $3.65 for 2025. AAP posted Q3 adjusted EPS of ($0.04) vs. ($1.19), well short of the $0.54 consensus. The miss was driven by a significantly weaker-than-expected top line, as revenue fell 3% to $2.15B ($520M below consensus) on a 2.3% drop in comp-store sales (60 bps below consensus). AAP's revised 2024 guidance implies Q4 net sales and adjusted EPS of $1.90B and ($1.50)-($0.90), respectively, well below the current consensus of $2.00B and $0.06. AAP also introduced preliminary FY 25 guidance and FY 27 financial goals, including bringing its leverage ratio (as measured by adjusted debt/EBITDAR) down from the current level of 3.7x to 3.0x-4.0x by year-end 2025 and 2.5x by year-end 2027. We lower our opinion to Sell as AAP continues to struggle with desperate attempts to right the ship through asset sales and store closures"
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 $40.94 yesterday.