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Advance Auto Parts (AAP) Dips More Than Broader Markets: What You Should Know

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Advance Auto Parts (AAP - Free Report) closed the most recent trading day at $143.62, moving -0.4% from the previous trading session. This change lagged the S&P 500's 0.16% loss on the day. Meanwhile, the Dow lost 0.26%, and the Nasdaq, a tech-heavy index, added 1.58%.

Heading into today, shares of the auto parts retailer had lost 2.09% over the past month, lagging the Retail-Wholesale sector's loss of 2.03% and the S&P 500's gain of 0.84% in that time.

Investors will be hoping for strength from Advance Auto Parts as it approaches its next earnings release, which is expected to be February 28, 2023. On that day, Advance Auto Parts is projected to report earnings of $2.43 per share, which would represent year-over-year growth of 17.39%. Meanwhile, our latest consensus estimate is calling for revenue of $2.42 billion, up 0.92% from the prior-year quarter.

Any recent changes to analyst estimates for Advance Auto Parts should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 1.93% lower. Advance Auto Parts is currently a Zacks Rank #4 (Sell).

Digging into valuation, Advance Auto Parts currently has a Forward P/E ratio of 11.07. Its industry sports an average Forward P/E of 22.03, so we one might conclude that Advance Auto Parts is trading at a discount comparatively.

Investors should also note that AAP has a PEG ratio of 0.97 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AAP's industry had an average PEG ratio of 1.82 as of yesterday's close.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 231, which puts it in the bottom 9% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AAP in the coming trading sessions, be sure to utilize Zacks.com.


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