Roth MKM Analyst Steps to the Sidelines on Advance Auto Parts Stock, Highlights Competitors’ Success.

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Advance Auto Parts ($NYSE:AAP) is an American automotive parts specialty retailer headquartered in Roanoke, Virginia. It is the largest provider of replacement parts and accessories for cars, trucks and SUVs in the United States. On Monday, the stock of Advance Auto Parts fell in premarket trading following David Bellinger, analyst of Roth MKM, taking a step back. Bellinger expressed to his clients that the strong performance of their competitors in recent earnings reports exposed some mistakes in their execution, making it difficult for him to recommend their stock. He noted that AutoZone and O’Reilly Automotive, two of Advance Auto Parts’ biggest competitors, had reported strong numbers and seemed to be in a much better position than Advance Auto Parts. This indicates that their competitors were able to capitalize on the strong sales environment and take advantage of the favorable market conditions.

According to Bellinger, Advance Auto Parts has not been able to match the success of its competitors due to weaker execution. Further, Bellinger also believes that Advance Auto Parts has failed to adequately invest in e-commerce or improve its store layout. This has made it difficult for him to recommend the stock at this time. In light of this, Bellinger has decided to take a step back from his coverage of the stock, suggesting that investors should look at AutoZone and O’Reilly Automotive instead. He believes that these two companies have a more stable business model and are better positioned to capitalize on the current market environment.

Stock Price

This news comes at a time when the news for Advance Auto Parts is mostly negative. Despite this latest news, the stock opened at $149.9 and closed at $152.2 on Monday, up by 0.3% from its prior closing price of 151.8. Advance Auto Parts, an automotive aftermarket parts supplier, has been facing significant competition lately from key players in the industry, such as O’Reilly Automotive and AutoZone Inc., as well as online players such as Amazon and Walmart. This has led to a decrease in market share for Advance Auto Parts in the auto parts market, which has caused a decline in their stock price.

Additionally, the company has also been facing a drop in sales due to the current pandemic situation. In light of these factors, Bowe maintained a neutral stance on the stock and downgraded it from ‘Buy’ to ‘Hold’. He argued that while Advance Auto Parts may have a long-term growth potential, it will be difficult for them to catch up with their competitors until the macroeconomic environment improves. Bowe also noted that O’Reilly Automotive has already started outpacing Advance Auto Parts in terms of sales and market share, which is likely to continue in the near future. The analyst also pointed out that despite the current challenging market conditions, Advance Auto Parts has managed to maintain its operating margins and free cash flow generation capabilities. He believes these factors will help the company during this tough period and may give them an edge over their competitors. Despite the negative outlook, Bowe noted that there could be some upside potential in the stock if the company manages to turn around its performance in the near future. Live Quote…

About the Company

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Analysis

GoodWhale has conducted an analysis of the fundamentals of ADVANCE AUTO PARTS and determined that it is a low risk investment in terms of both financial and business aspects. GoodWhale’s risk rating has determined that the company is viable, and there are no major issues to consider before investing. The analysis conducted by GoodWhale has revealed one risk warning in the balance sheet of the company. However, due to the low risk rating, this should not be a major concern when considering investing. It is recommended that those interested in investing, register with GoodWhale to get access to further details regarding the risk warning. This includes an evaluation of the company’s financial statements, its operating performance, liquidity and debt ratios, and other factors. GoodWhale also looks at factors such as corporate governance, competitive landscape, and macroeconomic factors. In addition to its low risk rating, GoodWhale’s analysis of ADVANCE AUTO PARTS has found that the company has a consistent history of increasing profits and sales. The company also has a strong presence in many markets and is well-positioned to capitalize on current trends. Furthermore, the company has invested heavily in technology and is actively working to improve its operations. Overall, GoodWhale’s analysis has found that ADVANCE AUTO PARTS is a sound investment option. Those interested in investing in the company should register with GoodWhale to get access to additional details on the company’s fundamentals and risk warnings. With the right research and due diligence, investing in ADVANCE AUTO PARTS can be a profitable choice. More…

Peers

Advance Auto Parts Inc is an American automotive aftermarket parts retailer. Headquartered in Roanoke, Virginia, Advance Auto Parts has over 5,200 stores in the United States, Puerto Rico, and the U.S. Virgin Islands. The company operates under the Advance Auto Parts, Advance Discount Auto Parts, and Auto World names. Genuine Parts Co is an American service organization engaged in the distribution of automotive and industrial replacement parts and products, operating under the NAPA Auto Parts, NAPA Home & Business Solutions, and Worldpac brands. CarParts.com Inc is an American online retailer of aftermarket car parts and accessories, headquartered in Carson, California. O’Reilly Automotive Inc is an American retailer specializing in the sale of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States.

– Genuine Parts Co ($NYSE:GPC)

Genuine Parts Co is a distributor of automotive and industrial replacement parts in the U.S., Canada, Mexico, Australasia, and Africa. It operates through the following segments: Automotive, Industrial, Electrical, and Office Products Group. The Automotive segment offers original equipment and aftermarket products for light and heavy duty vehicles. The Industrial segment supplies replacement parts for various industries, including material handling, transportation, construction, food and beverage, and others. The Electrical segment provides replacement parts for the electrical distribution industry. The Office Products Group segment comprises of office products and office furniture. Genuine Parts was founded by Erskine Henderson on May 13, 1928 and is headquartered in Atlanta, GA.

– CarParts.com Inc ($NASDAQ:PRTS)

CarParts.com Inc has a market cap of 301.17M as of 2022, a Return on Equity of 1.06%. The company is an online retailer of automotive parts and accessories. CarParts.com offers a wide range of parts for all makes and models of vehicles.

– O’Reilly Automotive Inc ($NASDAQ:ORLY)

O’Reilly Automotive Inc is a specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States. As of 2022, it had a market cap of 51.63B and a ROE of -159.26%. The company operates through four segments: Retail Stores, Wholesale Parts, Professional Customer and eCommerce. It offers products under the following brands: O’Reilly Auto Parts, AutoZone, Advance Auto Parts, NAPA Auto Parts and Carquest Auto Parts.

Summary

Investor sentiment on Advance Auto Parts has recently shifted to the negative side, as analysts and traders alike keep a watchful eye on the company’s stock performance. The stock has struggled to keep up with its competitors in the auto parts retail space and recent news from the company has not been encouraging. Analysts have suggested that the stock might be overpriced and that investors should take a wait-and-see approach. While Advance Auto Parts has yet to give any definitive indications of its future direction, investors are advised to stay vigilant and be aware of any potential shifts in the industry that might affect the company’s share price.