LKQ (LKQ) Downgraded to “Sell” at Zacks Investment Research

Zacks Investment Research cut shares of LKQ (NASDAQ:LKQ) from a hold rating to a sell rating in a research note released on Monday.

According to Zacks, “LKQ Corp’s global organic revenue growth from parts and services are likely to decline marginally in the fourth quarter. For 2018, the company anticipates organic revenue growth for Parts and services segment in the range of 4.5% to 5.0% compared with the prior guidance of 4.5-5.5%. High expenditure due to fluctuating prices of fuel, scrap metal and other commodities and product recall are adding to the company’s selling, general and administrative expenses, which will hurt its margins.”

A number of other equities research analysts have also recently weighed in on LKQ. TheStreet cut LKQ from a b- rating to a c+ rating in a research note on Tuesday, October 23rd. Barrington Research reiterated a buy rating and issued a $45.00 price objective on shares of LKQ in a research note on Monday, October 22nd. BidaskClub cut LKQ from a sell rating to a strong sell rating in a research note on Wednesday, September 26th. ValuEngine cut LKQ from a hold rating to a sell rating in a research note on Tuesday, September 11th. Finally, Raymond James cut their price target on LKQ from $40.00 to $35.00 and set a buy rating for the company in a research note on Wednesday, October 10th. Three analysts have rated the stock with a sell rating, one has given a hold rating and seven have given a buy rating to the company’s stock. The company has an average rating of Hold and an average target price of $42.50.

Shares of LKQ opened at $26.19 on Monday. The company has a debt-to-equity ratio of 0.87, a current ratio of 2.65 and a quick ratio of 1.04. The company has a market capitalization of $8.20 billion, a P/E ratio of 13.93, a price-to-earnings-growth ratio of 0.69 and a beta of 1.32. LKQ has a 52-week low of $22.74 and a 52-week high of $43.86.

LKQ (NASDAQ:LKQ) last announced its quarterly earnings results on Thursday, October 25th. The auto parts company reported $0.56 earnings per share (EPS) for the quarter, meeting the Zacks’ consensus estimate of $0.56. The firm had revenue of $3.12 billion during the quarter, compared to the consensus estimate of $3.12 billion. LKQ had a return on equity of 14.55% and a net margin of 5.01%. On average, sell-side analysts predict that LKQ will post 2.21 EPS for the current fiscal year.

LKQ announced that its board has approved a stock buyback program on Thursday, October 25th that authorizes the company to buyback $500.00 million in shares. This buyback authorization authorizes the auto parts company to reacquire up to 5.8% of its stock through open market purchases. Stock buyback programs are usually a sign that the company’s board of directors believes its shares are undervalued.

In other LKQ news, insider Dominick P. Zarcone acquired 2,000 shares of the business’s stock in a transaction on Friday, October 26th. The stock was purchased at an average price of $26.55 per share, for a total transaction of $53,100.00. Following the completion of the transaction, the insider now owns 259,080 shares of the company’s stock, valued at approximately $6,878,574. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this link. Also, VP Varun Laroyia acquired 1,000 shares of the business’s stock in a transaction on Friday, October 26th. The stock was acquired at an average price of $26.50 per share, with a total value of $26,500.00. Following the transaction, the vice president now directly owns 75,673 shares of the company’s stock, valued at approximately $2,005,334.50. The disclosure for this purchase can be found here. 0.80% of the stock is owned by corporate insiders.

A number of large investors have recently added to or reduced their stakes in the business. State of Alaska Department of Revenue raised its position in LKQ by 12.4% in the fourth quarter. State of Alaska Department of Revenue now owns 84,461 shares of the auto parts company’s stock worth $2,002,000 after acquiring an additional 9,294 shares in the last quarter. Fulton Bank N.A. grew its holdings in LKQ by 19.0% in the fourth quarter. Fulton Bank N.A. now owns 34,693 shares of the auto parts company’s stock valued at $823,000 after purchasing an additional 5,528 shares during the last quarter. Federated Investors Inc. PA grew its holdings in LKQ by 23,501.9% in the third quarter. Federated Investors Inc. PA now owns 1,384,250 shares of the auto parts company’s stock valued at $43,839,000 after purchasing an additional 1,378,385 shares during the last quarter. Marshall Wace LLP grew its holdings in LKQ by 2,889.7% in the third quarter. Marshall Wace LLP now owns 1,339,452 shares of the auto parts company’s stock valued at $42,420,000 after purchasing an additional 1,294,650 shares during the last quarter. Finally, Carnegie Capital Asset Management LLC grew its holdings in LKQ by 71.1% in the third quarter. Carnegie Capital Asset Management LLC now owns 36,409 shares of the auto parts company’s stock valued at $1,033,000 after purchasing an additional 15,124 shares during the last quarter. Hedge funds and other institutional investors own 90.11% of the company’s stock.

About LKQ

LKQ Corporation, together with its subsidiaries, distributes replacement parts, components, and systems used in the repair and maintenance of vehicles in North America, Europe, and Taiwan. It operates in three segments: North America, Europe, and Specialty. The company distributes bumper covers, automotive body panels, and lights, as well as automotive glass products, such as windshields; salvage products, including mechanical and collision parts comprising engines; transmissions; door assemblies; sheet metal products, such as trunk lids, fenders, and hoods; lights and bumper assemblies; scrap metal and other materials to metals recyclers; and brake pads, discs and sensors, clutches, steering and suspension products, filters, and oil and automotive fluids, as well as electrical products, including spark plugs and batteries.

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