U.S. Markets closed

O'Reilly Automotive Added To JPMorgan Analyst's 'Focus List'

Jayson Derrick

Among the multiple major players in the auto parts sector, O'Reilly Automotive Inc (NASDAQ: ORLY) stands out to benefit the most from a "weather deep dive" analysis, according to JPMorgan.

The Analyst

JPMorgan's Christopher Horvers maintains an Overweight rating on O'Reilly Automotive with a $398 price target and is now included in the firm's "Analyst Focus List."

The Thesis

Weather is a key factor in determining auto parts demand in terms of both "in the moment" (i.e., freezing weather prompts battery failure) and a lagged impact (repairs from salt on roads or corrosion), Horvers said in a research report. The research firm's analysis of weather trends found the following:

  • 2019 snowfall was down year-over-year in the northeast and up in north central. Based on a geographical exposure, O'Reilly Automotive is best positioned to take advantage of the 2019 "solid but not as good as 2018" snow trends.
  • 2018 summer was "good overall," but current forecasts call for a "relatively cooler" summer, especially in the west where O'Reilly has strong exposure.
  • O'Reilly's favorable geographic exposure should help the company regain the "best comp crown" in the group.

Price Action

Shares of O'Reilly Automotive traded higher by 2.5 percent to $385.89 Monday.

Related Links:

JPMorgan Upgrades O'Reilly Ahead Of Winter's Harsh Driving Conditions

Sell-Side Raise AutoZone Price Targets Following Big Earnings Beat

Photo credit: Michael Barera, from Wikimedia Commons

Latest Ratings for ORLY

Date Firm Action From To
Mar 2019 Evercore ISI Group Initiates Coverage On In-Line
Mar 2019 Atlantic Equities Downgrades Overweight Neutral
Dec 2018 Raymond James Reiterates Strong Buy Strong Buy

View More Analyst Ratings for ORLY
View the Latest Analyst Ratings

See more from Benzinga

© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.