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On Thursday, Truist Securities adjusted its outlook on O’Reilly (NASDAQ:ORLY) Automotive (NASDAQ: ORLY), increasing the price target to $1,539 from the previous $1,468 while maintaining a Buy rating on the stock. The adjustment follows O’Reilly’s first-quarter performance, which presented a modest beat on comparable store sales. According to InvestingPro data, the company’s market capitalization stands at $77.2 billion, with analyst targets ranging from $920 to $1,600, reflecting mixed views on the stock’s current valuation.
The company reported a 3.6% increase in comparable store sales, slightly above the 3.0% expected by Truist Securities. The company maintains a robust gross profit margin of 51.2%, though margins were somewhat below Truist’s forecasts, largely due to increased selling, general, and administrative expenses. Despite this, O’Reilly reaffirmed its comparable sales guidance of 2%-4% for the current year and slightly raised its earnings per share (EPS) guidance by approximately 1%. InvestingPro analysis shows the company’s diluted EPS reached $40.66 in the last twelve months, with analysts forecasting $43.99 for the upcoming fiscal year.
Truist’s analysis highlighted the shifting narrative around tariffs and their potential impact on the automotive parts sector. O’Reilly has not included any tariff effects in its guidance, but Truist suggests that the company and its peers in the auto parts industry could benefit from tariffs. This potential upside is attributed to increased same-SKU inflation and a greater consumer emphasis on maintenance and repair activities, as rising prices for new and used vehicles may affect affordability.
The analyst’s comments underlined a positive outlook for O’Reilly, despite the challenges posed by tariffs and other market dynamics. "While the tariff narrative is constantly shifting (and the company has not baked any impact into the guide), we continue to believe that O’Reilly and its auto part peers could be outright winners from tariffs due to higher same-SKU inflation and more consumer focus on maintenance/repair activity as new/used vehicle price increases hurt affordability. Remain buyers," said the Truist Securities analyst.
O’Reilly Automotive, a leading retailer in the automotive aftermarket parts industry, has been closely watched by investors for its performance amidst economic fluctuations and trade policy changes. The company has demonstrated steady growth with revenue increasing by 5.67% over the last twelve months to $16.7 billion. With the revised price target and maintained Buy rating, Truist Securities signals confidence in O’Reilly’s market position and future prospects. For deeper insights into O’Reilly’s valuation and growth potential, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports, which transform complex financial data into actionable intelligence.
In other recent news, O’Reilly Automotive Inc. reported its first-quarter 2025 earnings, revealing a miss on both earnings per share (EPS) and revenue forecasts. The company’s EPS was $9.35, below the expected $9.87, while revenue reached $4.14 billion, falling short of the $4.18 billion forecast. O’Reilly opened 38 new stores during the quarter and saw a 3.6% growth in comparable store sales, despite the earnings shortfall. The company maintains its full-year revenue guidance between $17.4 billion and $17.7 billion, with projected diluted EPS ranging from $42.9 to $43.4. Analyst firms have not provided any upgrades or downgrades in response to the earnings report. O’Reilly’s leadership emphasized their focus on strategic growth, despite challenges such as potential tariff impacts and supply chain disruptions. The company also announced a 15 to 1 stock split, subject to shareholder approval, aimed at making shares more accessible to employees.
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