Markets Should React Favorably On AAP’s Strong Q1 Results

Analysts at Oppenheimer & Co reiterate their "underperform" rating on Advance Auto Parts Inc AAP, while raising their estimates for the company. The target price for AAP has been raised from $39 to $46. AAP has posted better-than-expected Q1 results, driven by “significant re-acceleration in aftermarket automotive retail sales trends lately.” Oppenheimer mentions, “We expect the market to react favorably to AAP's 1Q results. AAP is no longer breaking out DIY and DIFM comps. This new lack of disclosure could weigh upon investor sentiment towards shares particularly as the market continues to look for evidence of success in AAP's turnaround efforts.” According to the analysts, “AAP repurchased 6.9M shares in 1Q for a total cost of $288M. This represents about 7% of total company shares outstanding. The company has $212M remaining under an existing $500M share repurchase authorization…Management's implied full-year guidance is now $3.34-3.54 to reflect an incremental benefit of $0.14 for share repurchases net of the recent notes offering.” Oppenheimer & Co has raised its EPS estimates for FY10 and FY11 from $3.25 to $3.55 and from $3.50 to $3.85, respectively to “reflect the stronger than expected 1Q results and net benefits from share repurchases.” More Analyst Ratings here