Analyst Simeon Gutman from Morgan Stanley maintained a Hold rating on Advance Auto Parts (AAP – Research Report) and keeping the price target at $50.00.
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Simeon Gutman has given his Hold rating due to a combination of factors related to Advance Auto Parts’ strategic store closures. The company plans to close a significant number of stores, with a focus on optimizing their store footprint and improving market concentration in areas where they are already market leaders. This move is expected to have a mixed impact, as it could present opportunities for competitors like O’Reilly Automotive (ORLY) and AutoZone (AZO) to gain market share.
The proximity of many closing stores to ORLY and AZO locations suggests those competitors may benefit from increased sales, projected to be around 55 basis points. While AAP’s actions are aimed at better positioning themselves in the market, the potential benefits to competitors create uncertainty about the net impact on their overall performance, leading to the Hold rating.
Gutman covers the Consumer Cyclical sector, focusing on stocks such as Tractor Supply, Lowe’s, and Advance Auto Parts. According to TipRanks, Gutman has an average return of 3.4% and a 61.65% success rate on recommended stocks.