Markets & Finance

Citigroup Lowers Advance Auto Parts to Hold


Advance Auto Parts (AAP) reported 90 cents, vs. 70 cents, second-quarter earnings per share. Citigroup downgraded the stock to hold from buy.

Analyst Bill Sims says the stock's valuation is full in context of his expectation for decelerating comp-store sales. He believes comps will likely decelerate back to the mid-single-digit range by the fourth quarter, making SG&A leverage and EPS upside opportunities more challenging; he thinks conservatism is widely discounted by investors.

Sims admits the downgrade may be early as fundamentals are still robust and management's third-quarter guidance is likely conservative.

He raised his 2005 EPS estimate to $3.23 from $3.14, 2006's to $4.05 from $3.84, and 2007's to $4.90 from $4.70. He also raised his price target to $75 from $70.


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Sponsored Financial Commentaries

Sponsored Links

Buy a link now!

 
blog comments powered by Disqus