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Investing.com - Truist Securities raised its price target on O’Reilly Automotive (NASDAQ:ORLY) to $109.00 from $103.00 on Friday, while maintaining a Buy rating on the auto parts retailer. According to InvestingPro data, 14 analysts have recently revised their earnings estimates upward, with the stock trading near its 52-week high of $100.1.
The price target increase follows O’Reilly’s second-quarter results, which Truist described as "in line/slightly better" than expected. The performance was primarily driven by approximately 10% growth in Commercial sales, contributing to the company’s impressive $17.1 billion in revenue and maintaining a solid 51.4% gross margin.
Truist noted that same-SKU inflation is beginning to provide benefits, contributing 150 basis points in the quarter. This inflation factor represents a key part of the firm’s bull thesis on the stock.
O’Reilly has raised its sales guidance to 3.0%-4.5% from the previous 2%-4% range. The company has not incorporated additional tariff-related price increases into its outlook, which Truist suggests could provide "incremental upside potential."
Truist views O’Reilly as "a key share gainer in a highly favorable industry," citing that higher new and used vehicle prices will likely continue to incentivize vehicle owners to repair and maintain their existing vehicles rather than replace them. The stock’s low volatility (Beta: 0.58) and strong financial health make it an interesting watch, though it currently trades at a premium P/E ratio of 34.18. Get comprehensive analysis and more insights with InvestingPro’s detailed research report.
In other recent news, O’Reilly Automotive has reported notable developments that have caught the attention of several investment firms. The company exceeded sales expectations with a comparable sales growth of 4.1%, surpassing market projections of around 3-3.8%. This strong performance led to multiple analysts raising their price targets for the company. JPMorgan increased its target to $114, maintaining an Overweight rating, while BMO Capital raised its target to $110 with an Outperform rating. TD Cowen also expressed optimism, setting a new target of $112 and highlighting O’Reilly’s ability to navigate tariff challenges. RBC Capital adjusted its target to $104, noting that O’Reilly’s results met headline expectations despite higher operating expenses. Evercore ISI raised its target to $107, citing the company’s strategy to enhance market share and margin expansion amid tariff conditions. These updates reflect a positive outlook from analysts regarding O’Reilly Automotive’s market position and future performance.
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