Redburn-Atlantic upgrades Advance Auto Parts stock rating to neutral

On Tuesday, Redburn-Atlantic analysts upgraded Advance Auto Parts stock (NYSE:AAP) from a sell rating to neutral. The analysts also increased the company’s price target to $45 from the previous target of $28. According to InvestingPro data, the stock appears undervalued, with analyst targets ranging from $28 to $65.

The decision to upgrade the stock comes despite ongoing concerns about the company’s investment strategy and balance sheet, with a debt-to-equity ratio of 1.86. While the company isn’t currently profitable, InvestingPro analysis shows analysts expect profitability to return this year. The company has demonstrated resilience with strong returns of over 18% in the past six months, positioning it to potentially benefit from a favorable second half of the year.

In their comments, the analysts noted that while the company has not yet made significant progress in its turnaround efforts, the expected favorable conditions could support the stock price in the near term. Despite current challenges, InvestingPro has identified several positive factors, including a 20-year track record of maintained dividend payments and strong recent momentum. Get access to 6 more exclusive ProTips and comprehensive analysis with InvestingPro.

The upgrade reflects a belief that Advance Auto Parts may have potential for near-term gains, even though structural challenges remain unaddressed. The price target increase indicates a more optimistic outlook compared to previous assessments.

Advance Auto Parts operates in the automotive aftermarket parts industry, and its stock is traded on the New York Stock Exchange under the ticker AAP.

In other recent news, Advance Auto Parts has been the focus of several analyst updates following its recent financial results. BMO Capital Markets raised its price target for the company to $50, maintaining an Outperform rating, citing strong first-quarter results for 2025 and improvements in the Pro business sector. Similarly, TD Cowen increased its price target to $53, attributing the rise to better-than-expected performance and improved margins, while maintaining a Hold rating. DA Davidson also adjusted its target to $47, keeping a Neutral stance, noting early signs of a successful turnaround despite market caution.

RBC Capital Markets maintained its price target at $44 with a Sector Perform rating, observing positive key performance indicators but requiring more evidence of sustained progress. JPMorgan raised its target to $44, retaining a Neutral rating, following better-than-expected comparable store sales and improved expense management. Analysts have generally acknowledged the company’s efforts in operational improvements and margin expansion strategies, though challenges remain in demonstrating consistent performance and expanding supply chain initiatives. Despite these advancements, the company faces a competitive market and potential market share losses.

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