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UPDATE: Citigroup Raises PT on Advance Auto Parts as Acquisition Execution Overhang Remains

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In a report published Thursday, Citigroup analyst Kate McShane reiterated a Neutral rating on Advance Auto Parts (NYSE: AAP), and raised the price target from $83.00 to $96.00.

In the report, Citigroup noted, “The all-cash transaction of 1,200+ co.-owned CARQUEST stores along with distribution to 1,400+ ind.-owned locations eclipses the BWP acquis. of 124 co.-owned stores last Dec. On a ttm basis, the combined entity generated $9.2B in revenue and $1.1B in EBITDA. The deal is expected to close by late '13 or early '14 & will be financed through a combination of cash, senior notes, term loan, & a revolver. AAP expects to maintain its investment grade rating & aims to repay the term loan and revolver within 24 months.”

Advance Auto Parts closed on Wednesday at $96.16.

Latest Ratings for AAP

DateFirmActionFromTo
Sep 2014William BlairInitiates Coverage onOutperform
Sep 2014WedbushReiteratesOutperform
Aug 2014Credit SuisseMaintainsOutperform

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