Advance Auto Parts reports earnings November 13

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Advance Auto Parts (AAP) reports third-quarter numbers November 13. The company will report before the market open, with the consensus calling for earnings of $1.76 for the quarter. During the same period last year the company earned $1.43 and the stock has been a strong performer in 2018 with shares appreciating 64.3% year to date.

Technical Analysis

AAP was recently trading at $174.35 down $0.36 from its 12-month high and $95.21 above its 12-month low. InvestorsObserver’s Stock Score Report gives AAP a 96 long-term technical score and a 99 short-term technical score. The stock has recent support above $160 and recent resistance below $173.50. Of the 18 analysts who cover the stock 9 rate it Strong Buy, 1 rate it Buy, 8 rate it Hold, 0 rate it Sell, and 0 rate it Strong Sell, AAP gets a score of 81 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

AAP has been a standout stock in 2018. Shares are up nearly 65% on the year, and the stock experienced minimal selling pressure in October as the overall market corrected. AAP’s ability to maintain strength even as the broader market trended lower is a testament to just how bullish traders are in the stock at this time. The company has posted big earnings beats the last four quarters, and while the street expects another beat this quarter, it has a whisper number of $1.77 which is just a penny above the consensus.

After a tough stretch that saw the company’s earnings fall 0.9% per annum over the last five years, Advance Auto is now moving in the right direction with earnings expected to rise by 29% during the current year and by 17.8% per annum over the next five years. The recent gains have lifted the stock’s valuation a little higher than I would like to see with a forward P/E of 21.4, but if the company is able to continue to show the earnings growth that the market expects the valuation is fine and should not prevent AAP from building on recent gains, especially if we see more quarters with big earnings beats like we have the last four quarters. Analysts have an average price target of $176, which is basically in-line with the current $174.35 trading price, but you can expect to see those estimates revised upwards should the company post a strong set of quarterly numbers.

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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