What's in the Offing for O'Reilly (ORLY) This Earnings Season?
O’Reilly Automotive ORLY is slated to release third-quarter 2022 results on Oct 26. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $8.43 and $3.71 billion, respectively.
For the third quarter, the consensus estimate for O’Reilly’ earnings per share has increased by 1 cent in the past 60 days. Its bottom-line estimates imply growth of 4.46% from the year-ago reported number. The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year increase of 6.6%. Over the trailing four quarters, O’Reilly surpassed earnings estimates on two occasions and missed the same twice, with the average surprise being 9.26%. This is depicted in the graph below:
O'Reilly Automotive, Inc. Price and EPS Surprise
O'Reilly Automotive, Inc. price-eps-surprise | O'Reilly Automotive, Inc. Quote
Q2 Highlights
In second-quarter 2022, ORLY’s adjusted earnings per share of $8.78 missed the consensus metric of $8.98 but rose 5.4% year over year. Lower-than-expected comps growth resulted in the underperformance. The company reported net sales of $3,670.7 million, lagging the Zacks Consensus Estimate of $3,696 million. The top line, however, rose 6% year over year.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for the automotive parts retailer for the quarter to be reported, as it does not have the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: ORLY has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate equals the Zacks Consensus Estimate.
Zacks Rank: It currently carries a Zacks Rank of 3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Things to Note
O’Reilly has a broad and diverse product portfolio that caters to the Do-it-Yourself and Do-it-for-Me customers. The dual market strategy provides the company with a competitive edge which is expected to have driven its comparable-store sales growth during the to-be-reported quarter. Encouragingly, the Zacks Consensus Estimate for the third quarter’s comps growth is pegged at 4.62%, higher than 4.3% recorded in the second quarter of 2022.
The demand for aftermarket parts is on the rise, spurred by higher demand for environmentally sustainable vehicles. As the electric vehicle fleet grows, owners are more driven to add modernized features to existing cars, which is an important contributor to O’Reilly’s aftermarket products. Moreover, the easing of Covid-related restrictions has seen a surge in vehicle miles traveled. This calls for a rise in the demand for repair parts and services. These, along with robust e-commerce activities, are likely to have acted as tailwinds for the automotive retailer in the third quarter.
Although O’Reilly’s intensive expansion of stores and distribution centers bodes well, it bears the brunt of ballooning SG&A expenses. O’Reilly’s omni-channel goals are likely to increase expenses even more, and these could have led to shrunken profit margins for the to-be-reported quarter. Discouragingly, the company expects its 2022 operating profits to fall year over year. This dims the outlook for ORLY’s upcoming results.
Stocks With Favorable Combination
While an earnings beat looks uncertain for O’Reilly, here are a few players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
PACCAR PCAR will release third-quarter 2022 results on Oct 25. The company has an Earnings ESP of +0.45% and a Zacks Rank #3.
The Zacks Consensus Estimate for PACCAR’s to-be-reported quarter’s earnings and revenues is pegged at $2.01 per share and $6.73 billion, respectively. PCAR surpassed earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 7.44%.
Oshkosh OSK will release third-quarter 2022 results on Oct 27. The company has an Earnings ESP of +3.36% and a Zacks Rank #3.
The Zacks Consensus Estimate for Oshkosh’s to-be-reported quarter’s earnings and revenues is pegged at $1.15 per share and $2.14 billion, respectively. OSK surpassed earnings estimates in two of the trailing four quarters and missed in the rest, with the average surprise being a negative 13.62%.
Lear LEA will release third-quarter 2022 results on Nov 1. The company has an Earnings ESP of +4.02% and a Zacks Rank #3.
The Zacks Consensus Estimate for Cummins’ to-be-reported quarter’s earnings and revenues is pegged at $2.12 per share and $5.18 billion, respectively. LEA surpassed earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 14.41%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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PACCAR Inc. (PCAR) : Free Stock Analysis Report
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