Back to top

Analyst Blog

On Oct 16, 2013, shares of O'Reilly Automotive Inc. (ORLY - Analyst Report) reached a new 52-week high of $132.54.

O’Reilly Automotive has a competitive advantage due to its dual market strategy and is continuously benefiting from a strong distribution network. The company reported positive earnings surprise in the past four quarters with an average beat of 4.07%.

Even in the third quarter of 2013, O’Reilly Automotive is expected to beat the Zacks Consensus Estimate of $1.65. The company is expected to release its third-quarter financial results after the closing bell on Oct 23.

O’Reilly Automotive aggressively continues to open new stores in order to achieve greater penetration in existing markets and to reach new, contiguous markets. In 2012, the company opened 185 stores and expects to open a total of 190 stores in 2013.

Further, O’Reilly Automotive pursues an aggressive share repurchase policy, which continues to boost earnings. In May 2013, the company’s board of directors approved an increase in share repurchase authorization by $500 million, taking the total authorization to $3.5 billion.

During the first half of 2013, O’Reilly Automotive repurchased 5.0 million shares for $502 million at an average price of $100.10. As of Jul 24, 2013, the company had approximately $521 million worth of shares remaining under its share repurchase program.

O’Reilly Automotive expects earnings per share in the range of $5.64 to $5.74 in 2013. The company also expects revenues of $6.6 billion to $6.7 billion, gross margin of 50.0% to 50.4% and operating margin between 15.8% and 16.2% for the year.

The Zacks Consensus Estimate for the company’s 2013 earnings per share stands at $5.95, up 25.17% over 2013. The estimate for 2014 stands at $6.77 per share, up 13.84% year over year.

O'Reilly Automotive is a prominent player in the automotive replacement parts and accessories industry along with Advance Auto Parts Inc. (AAP - Analyst Report), AutoZone Inc. (AZO - Analyst Report) and CarMax Inc. (KMX - Analyst Report). The company currently carries a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.