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Advance Auto Parts Inc - Stock Quote AAP

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Morningstar's Advance Auto Parts Inc 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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Advance’s Q1 Shows Resilience Amid Inflation and Economic Uncertainty; Shares Attractive

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

Our $233 per share valuation of narrow-moat Advance is unlikely to change much after it posted first-quarter earnings that leave it poised to meet our 2022 targets. With indications that its second quarter is off to a solid start, the firm is demonstrating our view that it and its scaled peers possess considerable competitive advantages that insulate them from economic turbulence. We believe Advance is on track to reach our long-term targets (mid-single-digit percentage top-line growth, low-double-digit operating margins over the next decade) and believe prevailing sentiment does not adequately credit long-term profitability improvement opportunities from the firm’s work to streamline its supply chain and optimize its footprint, resulting in a buying opportunity.

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Advance Auto Parts Inc's Company Profile

Business Description

Advance Auto Parts is one of the industry’s largest retailers of aftermarket automotive parts, tools, and accessories to do-it-yourself customers in North America. Advance operated 4,972 stores as of the end of 2021, in addition to servicing 1,317 independently owned Carquest stores. The company’s Worldpac unit is a premier distributor of imported original-equipment parts. Advance derived 58% of its 2021 sales from commercial clients, up from 30%-40% before the General Parts deal.

4200 Six Forks Road
Raleigh, NC, 27609
T +1 540 362-4911
Sector Consumer Cyclical
Industry Specialty Retail
Most Recent Earnings Mar 31, 2022
Fiscal Year End Jan 1, 2023
Stock Type Cyclical
Employees 68,000

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