Nucor earnings beat by $0.08, revenue fell short of estimates
On Thursday, O’Reilly Automotive (NASDAQ:ORLY), currently trading at $1,337.29 with a market capitalization of $76.75 billion, received a reaffirmation of a Buy rating and a price target of $1,525.00 from DA Davidson. According to InvestingPro analysis, the stock is currently trading above its Fair Value, with analyst targets ranging from $920 to $1,600. The firm’s analysts highlighted O’Reilly’s consecutive positive performance, marking the second quarter in a row that the company surpassed comparable sales expectations, following three previous quarters of missed comp sales.
The analysts noted that while the two-year stacked comparable sales showed some deceleration, the three-year stack remained consistent throughout 2024 and even showed signs of acceleration as 2025 began. Despite gross margins falling slightly short of estimates by 10 basis points, DA Davidson attributed most of this discrepancy to investments in Selling, General, and Administrative (SG&A) expenses. Consequently, operating profits and earnings per share (EPS) did not meet the consensus.
However, O’Reilly’s management reaffirmed their guidance, which aligns closely with consensus estimates, barring the EPS which was actually raised. This adjustment suggests that the company may have engaged in more incremental share buybacks than initially anticipated.
O’Reilly Automotive’s performance and the subsequent analyst commentary indicate a steady operational trajectory for the company, with strategic investments and share buybacks contributing to a favorable outlook from DA Davidson. The reiterated guidance and raised EPS forecast provide a clear expectation for O’Reilly’s financial performance moving forward.
In other recent news, O’Reilly Automotive reported first-quarter operating income of $741 million, falling short of the consensus forecast of $788 million. The discrepancy was mainly due to higher-than-expected Selling, General and Administrative expenses. However, the company saw a 3.6% increase in comparable store sales, surpassing both its own forecast and market expectations. Analysts have reacted to these developments with various price target adjustments. UBS raised its price target to $1,580, while Evercore ISI increased its target to $1,470, citing O’Reilly’s ability to navigate challenges like tariffs and weather conditions. TD Cowen set a new target of $1,600, maintaining a Buy rating and noting potential benefits from tariff adjustments. Guggenheim reiterated a $1,475 target, emphasizing the company’s strong positioning amid rising car prices. Additionally, O’Reilly Automotive has expanded its credit facility to $2.25 billion, enhancing its financial flexibility.
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