LKQ Faces Challenges in Europe in 4Q; Lowering FVE to $38 but Shares Still Undervalued
After taking a fresh look at LKQ, we are lowering our fair value estimate to $38 from $47 and maintaining our narrow-moat rating. The change is primarily due to a reduction in our stage II EBI growth estimate to 8% from 10% and a modest change in its revenue growth profile during our explicit five-year forecast. LKQ’s fourth-quarter earnings were in line with Street expectations with revenue matching consensus of $11.9 billion while adjusted EPS of $2.19 was $0.01 below consensus. These results ...LKQ is a holding company. Through its subsidiaries, the company provides alternative vehicle collision replacement products and alternative vehicle mechanical replacement products. The company is also a provider of alternative vehicle replacement and maintenance products in the United Kingdom, Germany, the Benelux region (Belgium, Netherlands, and Luxembourg), Italy, Czech Republic, Poland, Slovakia, Austria, and other European countries. In addition to its wholesale operations, the company operates self service retail facilities across the United States that sell recycled automotive products from end-of-life-vehicles. The company is also a distributor of specialty vehicle aftermarket equipment and accessories.
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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