UPDATE: UBS Investment Research Cuts PT to $100 on Advance Auto Parts; Q1 Expectations Low
UBS Investment Research reiterates its Buy rating on Advance Auto Parts (NYSE: AAP) but lowers its price target from $102 to $100 on concerns that Q1 results will lag expectations.
UBS Investment Research notes, "While we still like AAP's investment story, we think the 1Q'12 results will be uninspiring as recent industry trends have slowed a bit due to a pull forward in demand. There is a chance that AAP was caught off guard by this, resulting in less expense leverage than we previously anticipated. We are maintaining our 3.7% comp est. for the quarter, but are assuming 100 bps of SG&A leverage (vs. 130 bps previously), which drives our updated EPS est of $1.74 (vs. the consensus of $1.81). With the shares at 12x ‘13E, we think the risk is discounted in the stock."
AAP closed at $82.34 on Monday.
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