Morgan Stanley analyst Simeon Gutman has maintained their neutral stance on AAP stock, giving a Hold rating on February 20.
Simeon Gutman has given his Hold rating due to a combination of factors impacting Advance Auto Parts. The company’s current valuation is significantly above its long-term average, indicating that the market expects the business to improve its earnings performance. However, given the execution risks and uncertain consumer environment, there is a reluctance to predict significant growth beyond modest improvements in the near term.
While there is potential for a slight upside in the upcoming quarterly results, primarily due to store closures and favorable weather trends, the company’s long-term growth prospects seem limited. The anticipated earnings per share for 2025 are expected to be below industry trends, reflecting the challenges in its turnaround strategy. Thus, the Hold rating is due to the balance of potential risks and rewards, with a wide range of outcomes possible based on future performance.
Gutman covers the Consumer Cyclical sector, focusing on stocks such as Tractor Supply, Advance Auto Parts, and Wayfair. According to TipRanks, Gutman has an average return of 2.8% and a 59.92% success rate on recommended stocks.
In another report released on February 20, Citi also maintained a Hold rating on the stock with a $47.00 price target.
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