O’Reilly’s Poor First Half Should Lead Us to Cut Sector Valuations; Long-Term Opportunities Exist
O’Reilly’s first-half results fell well short of our expectations, and, as a result of an industry slowdown that is more persistent than we initially thought, we plan a mid- to high-single-digit percentage cut for our valuations for narrow-moat O’Reilly (currently $264 per share), AutoZone ($790 per share), and Advance Auto Parts ($180 per share) and a low- to mid-single-digit dip for narrow-moat Genuine Parts ($96 per share). However, we contend that the industry’s recent stumble is cyclical ra...Advance Auto Parts is an automotive aftermarket parts provider in North America, serving both professional installers (Professional), and do-it-yourself (DIY), customers as well as independently owned operators. The company's stores and branches provide a range selection of brand name, original equipment manufacturer and private label automotive replacement parts, accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles and light and heavy duty trucks. Through its integrated operating approach, the company serves its Professional and DIY customers through a variety of channels ranging from brick and mortar store locations to self-service e-commerce sites.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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