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Investing.com - CFRA lowered its price target on O’Reilly Automotive (NASDAQ:ORLY) to $100.00 from $1,500.00 on Tuesday, while maintaining a Buy rating on the auto parts retailer. The company, currently valued at $78.3 billion, has demonstrated strong financial health according to InvestingPro data.
The price target adjustment reflects O’Reilly’s recently completed 15-for-1 stock split rather than a change in the firm’s fundamental outlook on the company.
CFRA’s new target is based on a 2026 price-to-earnings ratio of 30x, which the research firm considers a justified premium to historic averages given favorable U.S. auto aftermarket fundamentals. According to InvestingPro analysis, the stock currently trades at 33.37x earnings, and based on the Fair Value model, appears to be trading above its intrinsic value. InvestingPro subscribers have access to 10+ additional valuation insights and metrics.
The firm cited tailwinds favoring increased maintenance and intensive repairs for used vehicles, noting the average U.S. vehicle age recently reached a record high of 12.8 years.
O’Reilly could benefit from competitor Advance Auto Parts (NYSE:AAP)’ recent closure of 500 stores nationwide, with the company’s first-quarter same-store sales growth of 3.6% already reaching the upper end of its full-year guidance range of 2%-4%, according to CFRA.
In other recent news, O’Reilly Automotive reported its first-quarter 2025 earnings, which revealed a miss on both earnings per share (EPS) and revenue forecasts. The company’s EPS came in at $9.35, below the expected $9.87, while revenue reached $4.14 billion, falling short of the $4.18 billion forecast. Despite these results, O’Reilly maintained its full-year revenue guidance between $17.4 billion and $17.7 billion. Additionally, the company plans to execute a 15-for-1 stock split, aiming to make its shares more accessible to a broader range of investors. Analyst firms have reacted to these developments, with RBC Capital reiterating an Outperform rating and DA Davidson adjusting its price target to $107 following the stock split. Mizuho (NYSE:MFG) Securities raised its price target to $1,445, citing consistent demand trends, particularly in the professional segment. Truist Securities also increased its price target to $1,539, maintaining a Buy rating, and highlighted potential benefits from tariffs for O’Reilly and its peers in the auto parts sector. These updates reflect a mix of challenges and opportunities for O’Reilly Automotive in the current market environment.
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