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NEW YORK (AP) — A mild winter was good news for car owners. Less rain and snow meant fewer traffic accidents, rusted underbellies and tire-busting pot holes.
But it wasn't good for companies that sell replacement auto parts, a Baird analyst said Thursday.
Analyst Craig Kennison downgraded LKQ Corp. to "Neutral" on expectations that the weather took less of a toll on vehicles in the U.S. this year.
Kennison noted that several other parts dealers including O'Reilly Automotive Inc., AutoZone Inc. and Advance Auto Parts Inc. have seen "decelerating trends" since April. The mild weather likely "resulted in less wear-and-tear, curbing demand for maintenance and failure parts," the analyst said.
LKQ, based in Chicago, benefits from a growing business in Europe. But that probably won't shield the company from the slowdown in U.S. sales, Kennison said.
He kept a $37 price target on the stock, which closed at Wednesday $33.96. He still expects the company to post profit of $1.85 per share for the year. On average, analysts expect profit of $1.84 per share, according to FactSet.
LKQ shares fell 92 cents, or 2.7 percent, to $33.04 in premarket trading. The stock is still up nearly 13 percent from the beginning of the year.