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3 Auto Parts Retail Stocks Poised to Benefit From Industry Trends
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The outlook for the Zacks Automotive - Retail and Wholesale - Parts industry remains constructive, supported by several key trends. The aging U.S. vehicle fleet continues to drive steady demand for replacement parts and maintenance. At the same time, growing vehicle technology is making repairs more complex, supporting greater reliance on professional services rather than DIY repairs. Digitization is also improving customer experience, helping retailers stay competitive and efficient.
While new vehicle sales may soften due to affordability challenges and economic pressure, consumers are likely to keep repairing existing vehicles. This makes the aftermarket more resilient and helps support stable demand for auto parts and services. Against such a backdrop, companies like O’Reilly Automotive (ORLY - Free Report) , AutoZone (AZO - Free Report) and Driven Brands Holdings (DRVN - Free Report) deserve your attention.
Industry Overview
The Zacks Automotive - Retail and Wholesale - Parts industry players execute several functions. These include retailing, distribution and installation of vehicle parts, equipment and accessories. Vehicle parts and accessories include seat covers, antifreeze, engine additives, wiper blades, batteries, brake system components, belts, chassis parts, driveline parts, engine parts and fuel pumps. Consumers have two options. They can either opt for repairing vehicles on their own (the ‘do-it-yourself’ or ‘DIY’ segment) or take the assistance of a professional repair facility (the "do-it-for-me" or "DIFM" segment). The industry is highly competitive and undergoing a radical change, with evolving customer expectations and technological innovation acting as game changers.
Factors At Play
Aging Vehicles Fuel Auto Parts Demand: The average age of vehicles on U.S. roads has reached a record level of 12.8 years, meaning cars are staying in service much longer. Older vehicles need more repairs and regular maintenance, which supports steady demand for replacement parts. Many consumers prefer maintaining existing cars instead of purchasing new ones because of high costs and economic uncertainty. This keeps repair shops and auto parts retailers busy. The aging vehicle fleet continues to be one of the strongest drivers for the aftermarket industry.
Technology Changing Repair Dynamics: Today’s vehicles come with advanced electronics, sensors and complex systems that make repairs more challenging. As cars become more technologically sophisticated, fewer owners are choosing to fix them on their own. Instead, they are relying more on professional mechanics and service centers. This shift supports growth in the “do-it-for-me” segment rather than the traditional DIY market. Companies supplying professional repair networks and specialized parts are better positioned to benefit from this evolving repair environment.
Digitization Enhancing Customer Experience: Companies are investing heavily in digital transformation to stay relevant and improve customer engagement. Online platforms, virtual product views, transparent pricing tools and digital service options are making buying and maintenance decisions simpler and more convenient. As consumer behavior shifts toward online research and purchasing, strong digital infrastructure becomes a key competitive advantage, supporting sales, efficiency and profitability in the industry.
Softening Auto Sales to Support Aftermarket Reliance: Vehicle sales in the United States are expected to soften amid slower economic growth and affordability challenges. High interest rates, reduced incentives and tighter consumer budgets are expected to make new vehicles harder to purchase. However, this environment may indirectly benefit the aftermarket. When people postpone buying new vehicles, they tend to repair and maintain their current ones instead. This helps support demand for auto parts and services, making the aftermarket more resilient compared with new vehicle sales.
Zacks Industry Rank Is Favorable
The Zacks Auto Retail & Wholesale Parts industry is within the broader Zacks Auto-Tires-Trucks sector. The industry currently carries a Zacks Industry Rank #62, which places it in the top 25% of roughly 245 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates strong near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are getting optimistic about this group’s earnings growth potential.
Before we present a few stocks that should be on your watchlist, let’s take a look at the industry’s shareholder returns and valuation first.
Industry Lags Sector and S&P 500
The Zacks Auto Retail and Wholesale Parts industry has underperformed the Auto, Tires and Truck sector and the Zacks S&P 500 composite over the past year. The industry has risen 2% over this period compared with the sector and the S&P 500’s growth of 12% and 20%, respectively.
One-Year Price Performance
Industry's Current Valuation
Since automotive companies are debt-laden, it makes sense to value them based on the Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) ratio.
Based on the trailing 12-month enterprise value to EBITDA (EV/EBITDA), the industry is currently trading at 25.82X compared with the S&P 500’s 18.9X and the sector’s 26.87X.
Over the past five years, the industry has traded as high as 32.70X and as low as 22.15X, with the median being 26.23X, as the chart below shows.
EV/EBITDA Ratio (Past 5 Years)
3 Stocks in Focus
Driven Brands is the largest automotive services company in North America, offering a wide range of services such as oil changes, maintenance, repair, paint, collision and glass services. The company operates nearly 4,900 locations across the United States and several international markets, serving millions of vehicles every year. One of its biggest growth drivers is the Take 5 Oil Change business, which focuses on quick, stay-in-your-car service and continues to expand rapidly through franchising. Driven Brands also benefits from reliable cash generation across its franchise model and service platforms. The company has been simplifying its portfolio, including exiting the car wash business, while working to reduce leverage. With solid scale, strong brands and continued network expansion, Driven Brands remains positioned to support growth and improve financial strength over time.
The company currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for DRVN’s 2026 EPS and sales indicates a year-over-year uptick of 16.7% and 7.7%, respectively.
O’Reilly continues to benefit from a disciplined expansion strategy, strong distribution network and customer-focused execution. The company has delivered record revenues for 32 consecutive years, highlighting its consistent performance. Store expansions remain a key growth driver, with hundreds of new locations being added across the United States, Mexico and soon Canada. Investments in new distribution centers, including those in Virginia and Texas, are strengthening supply chain capabilities and helping maintain strong in-stock levels. This supports better service quality and competitive positioning. With a proven pricing strategy, expanding footprint and strong logistics backbone, O’Reilly remains well-positioned for steady long-term growth in the North American auto parts retail market.
The company currently carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for ORLY’s 2026 EPS and sales indicates a year-over-year uptick of 11% and 7.3%, respectively.
Price & Consensus: ORLY
AutoZone continues to deliver strong performance, posting record sales for 36 straight years. The company expects growth to remain solid in fiscal 2026, supported by both its DIY customer base and expanding commercial business. Its strategy of rolling out more hub and mega-hub stores helps improve parts availability and service speed, strengthening customer loyalty. AutoZone is also expanding internationally, with aggressive store growth planned in Mexico and Brazil through 2028. A stronger distribution network and inventory positioning support long-term growth. The company also returns value to shareholders through significant share buybacks, which show confidence in its business strength and future prospects. In fiscal 2025, the firm repurchased shares worth $1.5 billion.
The company currently carries a Zacks Rank #3. The Zacks Consensus Estimate for AZO’s 2026 EPS and sales indicates a year-over-year uptick of 3% and 8%, respectively. The consensus mark for fiscal 2027 EPS and sales suggests growth of 19% and 7%, respectively, from the projected fiscal 2026 levels.
Price & Consensus: AZO
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3 Auto Parts Retail Stocks Poised to Benefit From Industry Trends
The outlook for the Zacks Automotive - Retail and Wholesale - Parts industry remains constructive, supported by several key trends. The aging U.S. vehicle fleet continues to drive steady demand for replacement parts and maintenance. At the same time, growing vehicle technology is making repairs more complex, supporting greater reliance on professional services rather than DIY repairs. Digitization is also improving customer experience, helping retailers stay competitive and efficient.
While new vehicle sales may soften due to affordability challenges and economic pressure, consumers are likely to keep repairing existing vehicles. This makes the aftermarket more resilient and helps support stable demand for auto parts and services. Against such a backdrop, companies like O’Reilly Automotive (ORLY - Free Report) , AutoZone (AZO - Free Report) and Driven Brands Holdings (DRVN - Free Report) deserve your attention.
Industry Overview
The Zacks Automotive - Retail and Wholesale - Parts industry players execute several functions. These include retailing, distribution and installation of vehicle parts, equipment and accessories. Vehicle parts and accessories include seat covers, antifreeze, engine additives, wiper blades, batteries, brake system components, belts, chassis parts, driveline parts, engine parts and fuel pumps. Consumers have two options. They can either opt for repairing vehicles on their own (the ‘do-it-yourself’ or ‘DIY’ segment) or take the assistance of a professional repair facility (the "do-it-for-me" or "DIFM" segment). The industry is highly competitive and undergoing a radical change, with evolving customer expectations and technological innovation acting as game changers.
Factors At Play
Aging Vehicles Fuel Auto Parts Demand: The average age of vehicles on U.S. roads has reached a record level of 12.8 years, meaning cars are staying in service much longer. Older vehicles need more repairs and regular maintenance, which supports steady demand for replacement parts. Many consumers prefer maintaining existing cars instead of purchasing new ones because of high costs and economic uncertainty. This keeps repair shops and auto parts retailers busy. The aging vehicle fleet continues to be one of the strongest drivers for the aftermarket industry.
Technology Changing Repair Dynamics: Today’s vehicles come with advanced electronics, sensors and complex systems that make repairs more challenging. As cars become more technologically sophisticated, fewer owners are choosing to fix them on their own. Instead, they are relying more on professional mechanics and service centers. This shift supports growth in the “do-it-for-me” segment rather than the traditional DIY market. Companies supplying professional repair networks and specialized parts are better positioned to benefit from this evolving repair environment.
Digitization Enhancing Customer Experience: Companies are investing heavily in digital transformation to stay relevant and improve customer engagement. Online platforms, virtual product views, transparent pricing tools and digital service options are making buying and maintenance decisions simpler and more convenient. As consumer behavior shifts toward online research and purchasing, strong digital infrastructure becomes a key competitive advantage, supporting sales, efficiency and profitability in the industry.
Softening Auto Sales to Support Aftermarket Reliance: Vehicle sales in the United States are expected to soften amid slower economic growth and affordability challenges. High interest rates, reduced incentives and tighter consumer budgets are expected to make new vehicles harder to purchase. However, this environment may indirectly benefit the aftermarket. When people postpone buying new vehicles, they tend to repair and maintain their current ones instead. This helps support demand for auto parts and services, making the aftermarket more resilient compared with new vehicle sales.
Zacks Industry Rank Is Favorable
The Zacks Auto Retail & Wholesale Parts industry is within the broader Zacks Auto-Tires-Trucks sector. The industry currently carries a Zacks Industry Rank #62, which places it in the top 25% of roughly 245 Zacks industries.
The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates strong near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are getting optimistic about this group’s earnings growth potential.
Before we present a few stocks that should be on your watchlist, let’s take a look at the industry’s shareholder returns and valuation first.
Industry Lags Sector and S&P 500
The Zacks Auto Retail and Wholesale Parts industry has underperformed the Auto, Tires and Truck sector and the Zacks S&P 500 composite over the past year. The industry has risen 2% over this period compared with the sector and the S&P 500’s growth of 12% and 20%, respectively.
One-Year Price Performance
Industry's Current Valuation
Since automotive companies are debt-laden, it makes sense to value them based on the Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) ratio.
Based on the trailing 12-month enterprise value to EBITDA (EV/EBITDA), the industry is currently trading at 25.82X compared with the S&P 500’s 18.9X and the sector’s 26.87X.
Over the past five years, the industry has traded as high as 32.70X and as low as 22.15X, with the median being 26.23X, as the chart below shows.
EV/EBITDA Ratio (Past 5 Years)
3 Stocks in Focus
Driven Brands is the largest automotive services company in North America, offering a wide range of services such as oil changes, maintenance, repair, paint, collision and glass services. The company operates nearly 4,900 locations across the United States and several international markets, serving millions of vehicles every year. One of its biggest growth drivers is the Take 5 Oil Change business, which focuses on quick, stay-in-your-car service and continues to expand rapidly through franchising. Driven Brands also benefits from reliable cash generation across its franchise model and service platforms. The company has been simplifying its portfolio, including exiting the car wash business, while working to reduce leverage. With solid scale, strong brands and continued network expansion, Driven Brands remains positioned to support growth and improve financial strength over time.
The company currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for DRVN’s 2026 EPS and sales indicates a year-over-year uptick of 16.7% and 7.7%, respectively.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price & Consensus: DRVN
O’Reilly continues to benefit from a disciplined expansion strategy, strong distribution network and customer-focused execution. The company has delivered record revenues for 32 consecutive years, highlighting its consistent performance. Store expansions remain a key growth driver, with hundreds of new locations being added across the United States, Mexico and soon Canada. Investments in new distribution centers, including those in Virginia and Texas, are strengthening supply chain capabilities and helping maintain strong in-stock levels. This supports better service quality and competitive positioning. With a proven pricing strategy, expanding footprint and strong logistics backbone, O’Reilly remains well-positioned for steady long-term growth in the North American auto parts retail market.
The company currently carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for ORLY’s 2026 EPS and sales indicates a year-over-year uptick of 11% and 7.3%, respectively.
Price & Consensus: ORLY
AutoZone continues to deliver strong performance, posting record sales for 36 straight years. The company expects growth to remain solid in fiscal 2026, supported by both its DIY customer base and expanding commercial business. Its strategy of rolling out more hub and mega-hub stores helps improve parts availability and service speed, strengthening customer loyalty. AutoZone is also expanding internationally, with aggressive store growth planned in Mexico and Brazil through 2028. A stronger distribution network and inventory positioning support long-term growth. The company also returns value to shareholders through significant share buybacks, which show confidence in its business strength and future prospects. In fiscal 2025, the firm repurchased shares worth $1.5 billion.
The company currently carries a Zacks Rank #3. The Zacks Consensus Estimate for AZO’s 2026 EPS and sales indicates a year-over-year uptick of 3% and 8%, respectively. The consensus mark for fiscal 2027 EPS and sales suggests growth of 19% and 7%, respectively, from the projected fiscal 2026 levels.
Price & Consensus: AZO