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O'Reilly Approves Additional $1B Repurchase Authorization

Zacks Equity Research
Group 1 Automotive (GPI) regularly acquires and divests dealerships and franchises to expand business.

To the delight of its shareholders, O'Reilly Automotive, Inc.’s ORLY board approved an increase in the share repurchase authorization program by an additional $1 billion. This raised the aggregate authorization under the program to $12.75 billion.

O’Reilly is a leading specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States. The company sells products to Do-it-Yourself (DIY) customers and Do-it-for-Me (DIFM) or professional installers. Strong cash flow aids O’Reilly to pursue an aggressive share-repurchase policy, which continues to boost earnings per share. In the first quarter of 2019, the company repurchased 0.9 million shares for $322 million. In 2018, it bought back 6.1 million shares for $1.71 billion.

The additional $1 billion authorization is effective for a three-year period, beginning on May 31, 2019.  In first-quarter 2019, O’Reilly’s adjusted earnings per share were $4.05, marking 12% rise from $3.61 in the prior-year quarter. However, the figure missed the Zacks Consensus Estimate of $4.06.

A few other stocks in the auto space are Ford Motor Company F, Fox Factory Holding Corp. FOXF and Cummins Inc. CMI. Ford, Fox Factory and Cummins have expected long-term growth rates of 7.3%, 16.4% and 8%, respectively.

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Fox Factory Holding Corp. (FOXF) : Free Stock Analysis Report
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