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What's in Store for O'Reilly (ORLY) This Earnings Season?

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Zacks Equity Research
·4 min read
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O'Reilly Automotive, Inc. ORLY is slated to release fourth-quarter 2020 results on Feb 10, after the closing bell. The Zacks Consensus Estimate for the quarter’s earnings is pegged at $5.12 per share on revenues of $2.76 billion.

This U.S.-based specialty retailer of automotive parts delivered better-than-anticipated results in the last reported quarter on stellar growth in comparable store sales.

Over the trailing four quarters, the company surpassed estimates on three occasions and missed in the other, the average surprise being 21.83%. This is depicted in the graph below:

OReilly Automotive, Inc. Price and EPS Surprise

OReilly Automotive, Inc. Price and EPS Surprise
OReilly Automotive, Inc. Price and EPS Surprise

OReilly Automotive, Inc. price-eps-surprise | OReilly Automotive, Inc. Quote


Investors project an earnings beat for O’Reilly this time around. Reassuringly, our model also indicates the same.

Trend in Estimate Revisions

The Zacks Consensus Estimate for O’Reilly’s fourth-quarter earnings per share has been revised upward by six cents in the past seven days. Moreover, it compares favorably with the year-ago quarter’s $4.25 per share, indicating year-on-year growth of 20.5%. Further, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year jump of 11.1%.

Earnings Whispers

Our proven model predicts an earnings beat for O’Reilly this time around. The 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. This has been elaborated below.

Earnings ESP: O’Reilly has an Earnings ESP of +1.88%. This is because the Most Accurate Estimate comes in 10 cents higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: O’Reilly currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors to Note

With the auto sector steadily recovering from the pandemic-induced disruptions, rising vehicle sales are likely to have spurred demand for parts, components and systems. This, in turn, is anticipated to have fueled O’Reilly’s top line during the fourth quarter.

Moreover, the company is estimated to have gained from store openings and distribution centers in profitable regions during the to-be-reported quarter. The Zacks Consensus Estimate for the number of stores at the end of the fourth quarter is pegged at 5,615, indicating a rise from the 5,460 and 5,613 recorded in the year-ago period and the prior quarter, respectively.

O’Reilly’s rising e-commerce initiatives like curbside pick-up for Buy Online and Pick Up In-Store orders are likely to have boosted sales during the October-December quarter. Also, the company’s wide-ranging product portfolio is likely to have stoked comparable store sales growth in the December-end quarter.

Other Stocks to Consider

Along with O’Reilly, here are a few other stocks lined up to release fourth-quarter results in February. Encouragingly, our model predicts earnings beats for these stocks as well:

BorgWarner BWA has an Earnings ESP of +2.94% and carries a Zacks Rank #3, currently. The company is scheduled to report quarterly numbers on Feb 11.

Allison Transmission Holdings ALSN has an Earnings ESP of +7.44% and carries a Zacks Rank #3 at present. The company will announce fourth-quarter 2020 results on Feb 17.

Magna International MGA has an Earnings ESP of +5.42% and currently flaunts a Zacks Rank of 1. The company is slated to release earnings figures on Feb 19.

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