O'Reilly Automotive (ORLY) - Bull of the Day

O'Reilly Automotive (ORLY) continues to benefit from its dual market strategy and strong distribution network. In the second quarter of 2010, the company beat the Zacks Consensus Estimate by $0.07 per share.

The CSK acquisition is expected to boost the company's earnings and savings in 2010, and will help the company outgrow its competitors. Moreover, the company's aggressive store opening strategy is well supported by its improving cash flow.

The current P/E, which is close to the mean of the historical range, is trading at a 29% discount to the peer group for 2010. Our long-term Outperform recommendation on the stock indicates that it would perform better than the market. Our $59 target price, 20.6X our 2010 EPS, reflects this view.
 
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