Can Advance Auto Parts (AAP) Drive Home Strong Q3 Numbers?

Last Updated: Friday, November 8, 2019 4:24 PM | Michael Fowlkes

What's Happening with aap

Auto parts retailer Advance Auto Parts (AAP) will report its third-quarter numbers November 12. The company is scheduled to release its quarterly numbers before the market open with the consensus calling for earnings of $2.07 per share. During the same period last year the company earned $1.89 and the stock has appreciated 6.3% on the year.

Technical Analysis

AAP was recently trading at $167.45 down $18.7 from its 12-month high and $37.36 above its 12-month low. InvestorsObserver's Stock Score Report gives AAP a 40 long-term technical score and a 47 short-term technical score. The stock has recent support above $155 and recent resistance below $170. Of the 16 analysts who cover the stock 9 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 49 from InvestorsObserver's Stock Score Report.

Analysts' Thoughts

AAP shares took a big hit over the summer after the company posted weaker than expected Q2 earnings and sales. Both numbers fell short of estimates and the results drove shares sharply lower to a 52-week low in mid-August. AAP has since recovered and is trading above where it was before the last quarterly report as the street expects a strong quarter with a whisper number of $2.12. The stock's valuation is a bit high with shares trading at 28 times earnings, so there is downside risk should the quarterly numbers fall short of the consensus. Profits have fallen 3% per annum over the last five years but looking ahead analysts see improvement with forecast profit growth of 18% per annum over the next five years. Given the stock's high valuation the company has to deliver a strong set of numbers, and with the street expecting a small earnings beat this is no room for error, and current shareholders should have a clear exit strategy in place in the event of another earnings miss. Analysts have a bullish price target of $179.09 on the stock.

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