O’Reilly Automotive (ORLY) Rating Lowered to Hold at Zacks Investment Research

O’Reilly Automotive (NASDAQ:ORLY) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research report issued on Friday.

According to Zacks, “O’Reilly’s benefits from its store expansions in new as well as existing markets. During the first nine months, ending on Sep 30, 2018, the company opened 171 stores, totaling to a store count of 5,190. Also, offering products to both Do-it-Yourself customers and Do-it-for-Me or professional installers aid O’Reilly in attracting a large number of customers across all markets. It also follows an aggressive share-repurchase policy to reward shareholders. In the past six months, shares of the company have outperformed the industry it belongs to. However, dependence on weather cycles and rising SG&A expenses are headwinds for O’Reilly. A continuous rise in the company’s SG&A expenses due to superior customer service, increased wages and rising fuel prices will hamper profit margin.”

A number of other equities research analysts have also weighed in on ORLY. BidaskClub lowered shares of O’Reilly Automotive from a “strong-buy” rating to a “buy” rating in a research note on Tuesday. Morgan Stanley boosted their target price on shares of O’Reilly Automotive from $345.00 to $355.00 and gave the company an “equal weight” rating in a research note on Tuesday, November 6th. Jefferies Financial Group boosted their target price on shares of O’Reilly Automotive from $350.00 to $375.00 and gave the company a “buy” rating in a research note on Friday, October 26th. Wells Fargo & Co boosted their target price on shares of O’Reilly Automotive from $345.00 to $375.00 and gave the company an “outperform” rating in a research note on Friday, October 26th. Finally, Wolfe Research lowered shares of O’Reilly Automotive from an “outperform” rating to a “market perform” rating in a research note on Friday, October 26th. Eight analysts have rated the stock with a hold rating, ten have issued a buy rating and two have given a strong buy rating to the stock. The stock currently has an average rating of “Buy” and a consensus target price of $343.94.

ORLY stock traded down $2.64 during midday trading on Friday, hitting $337.77. The company’s stock had a trading volume of 9,146 shares, compared to its average volume of 662,484. The stock has a market capitalization of $27.75 billion, a PE ratio of 28.53, a price-to-earnings-growth ratio of 1.37 and a beta of 1.10. O’Reilly Automotive has a 12 month low of $217.64 and a 12 month high of $363.20. The company has a current ratio of 0.91, a quick ratio of 0.11 and a debt-to-equity ratio of 6.37.

O’Reilly Automotive (NASDAQ:ORLY) last released its quarterly earnings data on Wednesday, October 24th. The specialty retailer reported $4.50 earnings per share (EPS) for the quarter, beating the consensus estimate of $4.31 by $0.19. The business had revenue of $2.48 billion for the quarter, compared to analysts’ expectations of $2.49 billion. O’Reilly Automotive had a return on equity of 259.86% and a net margin of 14.09%. On average, research analysts predict that O’Reilly Automotive will post 16.1 earnings per share for the current year.

O’Reilly Automotive announced that its board has approved a stock repurchase program on Tuesday, November 13th that authorizes the company to repurchase $1.00 billion in shares. This repurchase authorization authorizes the specialty retailer to repurchase up to 3.6% of its stock through open market purchases. Stock repurchase programs are often a sign that the company’s board of directors believes its stock is undervalued.

In other O’Reilly Automotive news, SVP Jeffrey Alan Lauro sold 12,526 shares of the stock in a transaction on Friday, November 9th. The stock was sold at an average price of $351.06, for a total value of $4,397,377.56. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. Corporate insiders own 3.12% of the company’s stock.

A number of hedge funds have recently modified their holdings of the business. BlackRock Inc. boosted its holdings in shares of O’Reilly Automotive by 1.3% during the 3rd quarter. BlackRock Inc. now owns 6,041,654 shares of the specialty retailer’s stock valued at $2,098,387,000 after purchasing an additional 75,454 shares during the last quarter. Vanguard Group Inc. lifted its holdings in shares of O’Reilly Automotive by 0.5% in the 3rd quarter. Vanguard Group Inc. now owns 5,891,448 shares of the specialty retailer’s stock valued at $2,046,218,000 after acquiring an additional 30,192 shares during the last quarter. Polen Capital Management LLC lifted its holdings in shares of O’Reilly Automotive by 1.8% in the 2nd quarter. Polen Capital Management LLC now owns 2,835,262 shares of the specialty retailer’s stock valued at $775,643,000 after acquiring an additional 48,778 shares during the last quarter. Bank of New York Mellon Corp lifted its holdings in shares of O’Reilly Automotive by 4.6% in the 2nd quarter. Bank of New York Mellon Corp now owns 1,441,213 shares of the specialty retailer’s stock valued at $394,273,000 after acquiring an additional 62,889 shares during the last quarter. Finally, American Century Companies Inc. lifted its holdings in shares of O’Reilly Automotive by 10.5% in the 2nd quarter. American Century Companies Inc. now owns 1,110,755 shares of the specialty retailer’s stock valued at $303,869,000 after acquiring an additional 105,794 shares during the last quarter. Institutional investors and hedge funds own 85.07% of the company’s stock.

About O’Reilly Automotive

O'Reilly Automotive, Inc, together with its subsidiaries, engages in the retail of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States. The company provides new and remanufactured automotive hard parts, such as alternators, starters, fuel pumps, water pumps, brake system components, batteries, belts, hoses, temperature controls, chassis parts, driveline parts, and engine parts; maintenance items comprising oil, antifreeze products, fluids, filters, wiper blades, lighting products, engine additives, and appearance products; and accessories, such as floor mats, seat covers, and truck accessories.

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