O’Reilly Automotive Retains Buy Rating at Deutsche Bank
Wednesday, September 28, 2021 1:42 PM

Analysts at Deutsche Bank reiterated Buy rating on the shares of O’Reilly Automotive Inc. (Nasdaq: ORLY) based on their growth rate forecast of 18 percent. They set a price target of $77, up from their previous PT of $70.

DB analysts state that in fiscal 2011 second quarter, O’Reilly Automotive had a 15 bps impact to gross margins as they were unable to pass through higher input prices on commodity based products at that time. They state that prices of automobiles have increased, which is positive for gross margins. They add that according to their analysis, O’Reilly Automotive is priced above AutoZone, which is the price leader in the sector with the lowest price in most items. They believe that after two months, O’Reilly will be able to pass through the higher prices, and so they are raising their gross margin assumptions over the coming quarters. They state that for the current and next quarter, they are raising the earnings per share estimates by 1 cent each and are now 1 cent ahead of consensus due to a better gross margin outlook. They add that their competitive estimates stay at 3.8 percent at the high end of guidance and consider more difficult comparisons and lower miles driven in July 2011. They state for FY2012, they are increasing their EPS estimate to $4.29 to $4.20 and are now 20 cents ahead of consensus, with changes including higher gross margins and more buybacks. They add that the risks involving O’Reilly include higher gas prices and increased new car sales.


On a year-to-date basis, O’Reilly Automotive has a share performance of 14.43 percent, and as compared to Standard & Poor’s 500, it has an YTD share performance of 26.64 percent.


O’Reilly Automotive is engaged in the retail of automotive aftermarket parts, tools, supplies, equipment and accessories in the US. It has a market capitalization of $9.40 billion with a P/E ratio of 20.7. It has more than 135 million outstanding shares.


Shares of O’Reilly Automotive added 0.99 percent or 67 cents to trade at $69.23.