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Investing.com - Raymond (NSE:RYMD) James has reduced its price target on LKQ Corp. (NASDAQ:LKQ) to $40.00 from $50.00 while maintaining an Outperform rating on the stock. The company currently trades at a P/E ratio of 11.6x and offers a 3.78% dividend yield, according to InvestingPro data.
The price target reduction follows LKQ’s second-quarter results, which Raymond James described as "bereft of many positives" amid soft market conditions and operational challenges in Europe.
LKQ has cut its 2025 guidance to reflect prolonged weakness in repairable claims, prompting a significant market reaction with shares falling approximately 20% on what Raymond James characterized as a 10% guidance reduction.
Despite the challenges, Raymond James views the market reaction as "overdone" and notes that LKQ’s valuation is approaching 10-year lows.
The firm maintains its Outperform rating based on the current guidance assuming "effectively no 2H recovery" and supportive valuation, suggesting a favorable setup following the earnings report, particularly if the company’s portfolio review yields positive results.
In other recent news, LKQ Corporation announced its second-quarter 2025 earnings, reporting an earnings per share (EPS) of $0.87. This figure fell short of the anticipated $0.92, resulting in a 5.43% negative surprise. However, the company slightly exceeded revenue expectations, posting $3.64 billion compared to the projected $3.62 billion. Despite the revenue beat, the market reacted negatively to the earnings miss and revised guidance. Analysts have been closely watching these developments, with some firms potentially adjusting their outlook on LKQ. The company’s financial performance and future guidance remain under scrutiny. These recent developments highlight the importance of earnings and revenue results for investors.
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