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LKQ Corp - Stock Quote LKQ

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Morningstar's LKQ Corp Stock Analysis

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Is it the right time to buy or sell?
Is it the right time to buy or sell?

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Our Long-Term Thesis Remains Intact Following LKQ’s Investor Day

Dawit Woldemariam Equity Analyst

Analyst Note

| Dawit Woldemariam |

Narrow-moat-rated LKQ recently held its investor day, where it provided updates on its segment operations and commitment to generate strong free cash flow throughout the cycle. Following the event, our $46 fair value estimate is unchanged, as our long-term thesis remains intact. The demand environment continues to improve as key metrics like vehicle miles traveled and vehicle age have created demand for LKQ’s products. We also believe LKQ’s scale-driven cost advantages over smaller competitors will allow the company to earn strong returns on invested capital through our forecast (approximately 20% on average). In addition, we think management will be able to meet its $1 billion annual free cash flow target, thanks to moves to structurally improve working capital efficiency.

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LKQ Corp's Company Profile

Business Description

LKQ is a leading Global distributor of non-OEM automotive parts. Initially formed in 1998 as a consolidator of auto salvage operations in the United States, it has since greatly expanded its scope to include distribution of new mechanical and collision parts, specialty auto equipment, and remanufactured and recycled parts in both Europe and North America. It still maintains its auto salvage business and owns over 70 LKQ pick-your-part junkyards. Separate from the self-service business, LKQ purchases over 300,000 salvage automobiles annually that are used to extract parts for resale. Globally, LKQ maintains approximately 1,700 facilities.

500 West Madison Street, Suite 2800
Chicago, IL, 60661
T +1 312 621-1950
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Cyclical
Employees 46,000