BofA Upgrades O'Reilly After A Relook At Q1 Print

O'Reilly Automotive Inc ORLY is a defensive auto-parts retailer whose stock has moved significantly lower, according to BofA Securities.

The O'Reilly Automotive Analyst: Elizabeth Suzuki upgraded the rating for O’Reilly Automotive from Neutral to Buy, while maintaining the price target at $730.

The O'Reilly Automotive Thesis: The upgrade in rating is based on valuation, “which now appears attractive,” and the BofA US Equity & Quant Strategy team’s improved outlook for the Consumer Staples sector, Suzuki said in the upgrade note.

While O'Reilly Automotive’s stock declined after its earnings miss versus consensus, “the miss was primarily a function of sell-side mis-modeling of YoY SG&A growth, which did not properly account for the unsustainably low level of SG&A as a % of sales in 1Q21 when sales growth spiked and staffing levels were low,” the analyst wrote.

“ORLY is a best-in-breed retailer, now at a discount,” she added.

ORLY Price Action: Shares of O'Reilly Automotive had risen by 0.93% to $615.76 at the time of publication Tuesday.

Photo: Courtesy of JJBers on Flickr