Advance Auto Parts (AAP) Trading 10.6% Higher on Strong Earnings

Advance Auto Parts, Inc. (NYSE:AAP) traded up 10.6% during mid-day trading on Tuesday following a stronger than expected earnings report. The stock traded as high as $185.50 and last traded at $184.72. 3,662,710 shares traded hands during trading, an increase of 217% from the average session volume of 1,154,104 shares. The stock had previously closed at $167.06.

The company reported $1.89 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $1.76 by $0.13. The company had revenue of $2.28 billion for the quarter, compared to analyst estimates of $2.23 billion. Advance Auto Parts had a net margin of 5.68% and a return on equity of 13.43%. The company’s revenue was up 4.3% on a year-over-year basis. During the same period in the prior year, the firm earned $1.43 earnings per share.

Advance Auto Parts declared that its Board of Directors has authorized a stock buyback plan on Tuesday, August 14th that authorizes the company to repurchase $600.00 million in outstanding shares. This repurchase authorization authorizes the company to purchase up to 5.5% of its shares through open market purchases. Shares repurchase plans are usually a sign that the company’s board of directors believes its shares are undervalued.

AAP has been the topic of a number of recent research reports. Guggenheim reaffirmed a “buy” rating and set a $174.00 price target on shares of Advance Auto Parts in a research report on Thursday, August 16th. Deutsche Bank raised their price target on shares of Advance Auto Parts from $155.00 to $171.00 and gave the stock a “buy” rating in a research report on Wednesday, August 15th. Wedbush set a $175.00 price target on shares of Advance Auto Parts and gave the stock a “buy” rating in a research report on Wednesday, August 15th. Zacks Investment Research raised shares of Advance Auto Parts from a “hold” rating to a “buy” rating and set a $164.00 price target on the stock in a research report on Thursday, August 9th. Finally, Argus raised their price target on shares of Advance Auto Parts from $155.00 to $184.00 and gave the stock a “buy” rating in a research report on Monday, September 17th. They noted that the move was a valuation call. Eight research analysts have rated the stock with a hold rating and thirteen have assigned a buy rating to the company. Advance Auto Parts has an average rating of “Buy” and a consensus target price of $155.11.

In other news, Director Nigel Travis bought 1,250 shares of the firm’s stock in a transaction on Friday, August 17th. The shares were purchased at an average cost of $159.70 per share, with a total value of $199,625.00. Following the acquisition, the director now directly owns 1,250 shares in the company, valued at $199,625. The purchase was disclosed in a filing with the SEC, which is available through this hyperlink. 4.50% of the stock is owned by company insiders.

Hedge funds have recently added to or reduced their stakes in the business. Piedmont Investment Advisors LLC bought a new position in Advance Auto Parts in the 2nd quarter valued at about $116,000. Tower Research Capital LLC TRC acquired a new stake in shares of Advance Auto Parts in the 2nd quarter valued at approximately $117,000. Federated Investors Inc. PA acquired a new stake in shares of Advance Auto Parts in the 2nd quarter valued at approximately $124,000. ClariVest Asset Management LLC acquired a new stake in shares of Advance Auto Parts in the 3rd quarter valued at approximately $173,000. Finally, First Mercantile Trust Co. acquired a new stake in shares of Advance Auto Parts in the 2nd quarter valued at approximately $162,000.

The company has a current ratio of 1.63, a quick ratio of 0.48 and a debt-to-equity ratio of 0.29. The company has a market cap of $12.68 billion, a price-to-earnings ratio of 34.40, a P/E/G ratio of 1.99 and a beta of 1.04.

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About Advance Auto Parts (NYSE:AAP)

Advance Auto Parts, Inc provides automotive replacement parts, batteries, accessories, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. It offers battery accessories, belts and hoses, brakes and brake pads, chassis and climate control parts, clutches and drive shafts, engines and engine parts, exhaust systems and parts, hub assemblies, ignition components and wires, radiators and cooling parts, starters and alternators, and steering and alignment parts.

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