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Investing.com - DA Davidson lowered its price target on Advance Auto Parts (NYSE:AAP) to $63 from $65 while maintaining a Neutral rating on Thursday. The stock currently trades at $56.97, with analyst targets ranging from $30 to $65, according to InvestingPro data.
The research firm noted that Advance Auto Parts is in the early stages of its three-year turnaround plan and is showing positive directional trends with several initiatives yielding early results. The company’s efforts appear to be gaining traction, reflected in its 30.7% price return over the past six months.
Despite these improvements, DA Davidson highlighted that the auto parts retailer still requires "hundreds of basis of improvement" to achieve its three-year targets, which implies some acceleration and adds risk to the outlook.
The firm believes Advance Auto Parts is planning for similar improvement levels in 2026 as seen in 2025, which it characterizes as "still a build year" for the company.
According to DA Davidson, Advance Auto Parts expects its margin run rate by the end of 2026 to demonstrate a visible path to 7% by 2027, with the new price target based on 15 times the firm’s 2026 earnings estimates.
In other recent news, Advance Auto Parts announced its second-quarter 2025 earnings, reporting an adjusted diluted earnings per share (EPS) of $0.69, which exceeded the forecast of $0.53. This represents a 30.19% surprise for investors. The company’s revenue for the quarter reached $2 billion, slightly higher than the forecasted $1.97 billion, though it marked an 8% decline compared to the previous year. These results highlight ongoing challenges in the market for Advance Auto Parts. Despite the positive earnings surprise, the company’s stock experienced a decline. Analysts from various firms have noted these developments, with some adjusting their outlooks accordingly. These recent developments are crucial for investors as they assess the company’s financial performance and future prospects.
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