Nucor earnings beat by $0.08, revenue fell short of estimates
On Friday, Mizuho (NYSE:MFG) Securities analyst David Bellinger increased the price target on O’Reilly Automotive (NASDAQ:ORLY) shares, setting it at $1,445.00, up from the previous $1,400.00, while maintaining an Outperform rating on the stock. According to InvestingPro data, the company is currently trading above its Fair Value, with a P/E ratio of 33.8x and strong revenue growth of 4.9% over the last twelve months. Bellinger’s adjustment followed O’Reilly’s first-quarter financial results which displayed mixed performance but underscored consistent demand trends, especially in the professional segment.
O’Reilly Automotive’s stock experienced a slight dip on Friday after the company reported its first-quarter results. With a market capitalization of $77.2 billion and an impressive gross profit margin of 51.2%, the quarter was characterized by modest single-digit percentage growth in professional comparable sales, with March showing the strongest performance and April continuing to yield solid results. Bellinger highlighted these demand trends in his analysis of the company’s financials.
The report from Mizuho detailed that same SKU inflation was below the company’s internal estimates, remaining under 50 basis points. This was largely attributed to timing and had minimal impact from tariffs. However, the analyst noted potential for upside as additional costs might become more pronounced. On the expenditure side, selling, general and administrative expenses per store increased by 4.1%, marking the second consecutive quarter where O’Reilly has seen cost overruns in areas such as payroll, benefits, or self-insurance. For the remainder of the year, these costs are expected to grow in the +3% range.
Looking ahead, O’Reilly Automotive plans to execute a 15-for-1 stock split, which is anticipated to benefit the company by enhancing employee retention and alleviating some upward wage pressures. Bellinger expressed confidence in O’Reilly’s capability to transfer incremental costs to its core customers, reinforcing the Outperform rating and the raised price target. InvestingPro analysis reveals analyst targets ranging from $920 to $1,600, with 10+ additional exclusive insights available to subscribers through the comprehensive Pro Research Report.
In other recent news, O’Reilly Automotive reported its first-quarter 2025 earnings, revealing 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 and slightly raised its earnings per share guidance by approximately 1%. Truist Securities responded by raising O’Reilly’s stock price target to $1,539 from $1,468, maintaining a Buy rating. The company reported a 3.6% increase in comparable store sales, slightly above the 3.0% expected by Truist Securities. Furthermore, O’Reilly opened 38 new stores during the quarter, indicating ongoing expansion efforts. The company has not factored any potential tariff effects into its guidance, although Truist suggests that O’Reilly and its peers could benefit from tariffs due to increased same-SKU inflation and a greater consumer emphasis on maintenance and repair activities.
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