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Investing.com - DA Davidson lowered its price target on Advance Auto Parts (NYSE:AAP) to $55.00 from $63.00 on Friday, while maintaining a Neutral rating on the auto parts retailer. The stock is currently trading at $47.99, having fallen 7.07% in the past week despite a significant 56.38% rally over the last six months, according to InvestingPro data.
The price target reduction follows what DA Davidson described as a "strong print" from Advance Auto Parts ’ latest earnings report, though the firm characterized its overall assessment as "mixed." This mixed view aligns with the company’s financial reality – InvestingPro data shows AAP is not profitable over the last twelve months, with a diluted EPS of -$9.97.
On the positive side, DA Davidson noted that Advance Auto Parts has made "tangible progress" on several key operational initiatives, which have contributed to an 80 basis points margin improvement on a last-twelve-months basis.
The firm also pointed out that the impact of the First Brand bankruptcy appears limited, resulting in a $28 million non-cash writedown for Advance Auto Parts.
Despite these positives, DA Davidson observed that comparable sales weakened later in the third quarter and continued this trend into the fourth quarter, a pattern the firm noted was consistent with other companies in the sector.
In other recent news, Advance Auto Parts reported stronger-than-expected earnings for the third quarter of 2025, with adjusted earnings per share reaching $0.92, surpassing the forecasted $0.77. The company achieved revenue of $2 billion, slightly below the forecast of $2.02 billion. Analysts at BofA Securities raised their price target for Advance Auto Parts to $40.00 from $34.00, maintaining an Underperform rating, following the company’s third-quarter earnings report. CFRA upgraded Advance Auto Parts from Sell to Hold and increased its price target to $55.00 from $40.00, citing expectations for a "structurally stronger company" under CEO Shane O’Kelly. The firm highlighted the closure of underperforming stores and improved liquidity, with Advance Auto Parts ending the quarter with $3.17 billion in cash. BMO Capital also raised its price target to $55.00 from $50.00, maintaining a Market Perform rating, noting the company’s benefit from tariff price inflation in the third quarter. These recent developments reflect a mix of analyst opinions and expectations for the company’s future performance.
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