O'Reilly Automotive Added To JPMorgan Analyst's 'Focus List'
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.
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Photo credit: Michael Barera, from Wikimedia Commons
Latest Ratings for ORLY
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 |
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