UPDATE: Goldman Sachs PT on Advance Auto Parts to Reflect 3Q Results
In a report published Thursday, Goldman Sachs analyst Mathew Fassier raised estimates and PT for Advance Auto Parts, Inc. (NYSE: AAP) to reflect 3Q results.
Goldman Sachs earnings estimate range from $7.23-$7.40 for 2014, $8.18-$8.35 for 2015 and $9.35-$9.64 for 2016. The analyst raised 2013 EPS from $5.52 to $5.65 and the PT from $93 to $105.
Advance Auto Parts announced that they will acquire General Parts International for $2.04B cash on October 16th. Though General Parts operates with lower margins than their peers, the analyst suggested that this acquisition will benefit both firms, "through buying scale, operating efficiencies, and complementary skill sets." Additional benefits mentioned include $160M in synergies, "Carquest's national presence – real estate and distribution – gives AAP a true national footprint," and the gain of the Woldpac asset. Fassier commented that neither company has a strong track record to enhance the operating performance of this merger.
Advance Auto Parts closed at $97.22 on Thursday, up 1.10% for the day.
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