Advance Auto Parts (AAP) to Report Second Quarter Earnings

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Advance Auto Parts (AAP) is expected to report second-quarter earnings August 13. The company is scheduled to release its quarterly numbers before the market open with the consensus calling for earnings of $2.22 per share. During the same period last year the company earned $1.97 and the stock is down 8.8% year to date.

Technical Analysis

AAP stock was recently trading at $143.6 down $42.55 from its 12-month high and $3.63 above its 12-month low. InvestorsObserver’s Stock Score Report gives AAP a 41 long-term technical score and a 29 short-term technical score. The stock has recent support above $140 and recent resistance below $155. Of the 17 analysts who cover the stock 10 rate it Strong Buy, 1 rate it Buy, 6 rate it Hold, 0 rate it Sell, and 0 rate it Strong Sell, AAP gets a score of 50 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

AAP stock has been stuck in a downward trend for the last five months despite posting better than expected earnings last quarter. Earnings have started to rise and are expected to increase 14.4% this year and at an annual rate of 18.2% over the next five years. The stock’s recent weakness has pulled shares down to just 15 times future earnings which makes the stock look attractive considering the strong growth forecast. The auto industry has cooled after years of record sales, which has weighed on auto parts dealers, but the long-term outlook for the sector remains bright as the average age of cars on the highway remains at record highs. There has been a lot of negativity priced into the stock, but analysts remain bullish with an average price target of $195.83 which suggests shares are undervalued by as much as 36%. With shares at just 15 times future earnings, and the stock trading just above its 52-week low there is a good chance for a quick rally as long as earnings and revenues both come in above estimates.

About Advance Auto Parts Inc W/I

Advance Auto Parts is one of the industry's largest retailers of aftermarket automotive parts, tools, and accessories to do-it-yourself customers in North America. Advance operated 5,109 stores as of the end of 2018, in addition to servicing 1,231 independently owned Carquest stores. The company's Worldpac unit is a premier distributor of imported original-equipment parts. Advance derived 58% of its 2018 sales from commercial clients, up from 30%-40% before the General Parts deal.

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