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Shares of O’Reilly Automotive Inc. (ORLY - Analyst Report) hit a new 52-week high of $116.14 on Jul 5, which is above its previous level of $115.85 on Jul 2, and closed at $115.75 on the same date. The closing price represented a solid one-year return of 33.7% and year-to-date return of 28.8%.
O’Reilly Automotive, headquartered in Springfield, Mo., is the third largest specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories in the U.S., selling products to both Do-it-Yourself (DIY) customers and Do-it-for-Me (DIFM) or professional installers. It has a market cap of $12.8 billion. Average volume of shares traded over the last three months stood at approximately 719.3K.
Shares of the company started escalating following its improved first-quarter results and promising guidance announced on Apr 24 as well as improving fundamentals in the automotive market.
ORLY posted a 19.3% increase in earnings to $1.36 per share in the first quarter of 2013 compared with $1.14 in the year-ago quarter, exceeding the Zacks Consensus Estimate by a penny. Net income improved 5% to $154 million (9.7% of sales) from $147 million (9.6%) in the first quarter of 2012.
Revenues in the quarter scaled up 4% to $1.59 billion from $1.53 billion in the same period a year ago. Comparable store sales increased 1.9% compared with 6.1% in the first quarter of 2012 (both adjusted for the impact of Leap Day in 2012-quarter).
O’Reilly Automotive has projected earnings per share in the range of $1.46–$1.50 and consolidated comparable store sales to increase in a band of 4% to 6% for the second quarter of 2013.
For full year 2013, the company raised its earnings per share guidance to the range of $5.64 to $5.74 from the earlier range of $5.57 to $5.67. However, it reiterated its guidance of consolidated comparable store sales increase of 3% to 5% for the year.
ORLY also reiterated revenue guidance of $6.6 billion to $6.7 billion, upgraded gross margin guidance to 50.0% to 50.4% from 49.9% to 50.3%, and reiterated operating margin guidance between 15.8% and 16.2% for the year.
Further, U.S. automotive industry continues to improve driven by continued macroeconomic recovery, aging vehicles on the U.S. roads and strong demand for commercial vehicles from businesses. Vehicle sales in June reached its highest level in nearly half a decade, indicating increased economic activities. Seasonally adjusted annual sales rate in the month was 15.9 million units, the best since Nov 2007.
Currently, shares of O’Reilly Automotive retain a Zacks Rank #3 (Hold). Some other stocks that are also performing well in the broader industry where ORLY operates include CarMax Inc. (KMX - Analyst Report), Lithia Motors Inc. (LAD - Snapshot Report) and Sonic Automotive Inc. (SAH - Snapshot Report). All of them carry a Zacks Rank #2 (Buy).