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Morgan Stanley Continues To Prefer DIY Auto, Home Improvement Segments in Hardline Group

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Morgan Stanley issued their Hardline/Broadline Outlook for 2016 and highlighted several companies including Lowe's Companies, Inc. (NYSE: LOW), Advance Auto Parts, Inc. (NYSE: AAP), O'Reilly Automotive Inc (NASDAQ: ORLY), AutoZone, Inc. (NYSE: AZO) and Home Depot Inc (NYSE: HD).

Analysts Simeon Gutman and Joshua Siber wrote, "We continue to prefer the DIY Auto and Home Improvement segments given our forecasts for healthy top-line growth and margins. Our top idea is LOW given favorable secular tailwinds and 20 percent achievable WPS growth. We also like AAP, OW-rated ORLY, and risk/reward is favorable for EW rated AZO and HD."

The analysts highlighted a few of their top picks:

Lowe's: $84 price target

Analysts see the potential for growth due to strong product offerings in combination with efficient cost structures.

Advance Auto Parts: $195 price target

Morgan Stanley sees a recent management change as a positive catalyst for the company going forward along with the opportunity to drive top-line growth. However, in the near term, Morgan Stanley considers the company to be "dead money."

O'Reilly Automotive: $300 price target

Morgan Stanley sees near-term secular growth and gains in market share driven by high quality of services and strong management.

Latest Ratings for LOW

DateFirmActionFromTo
Apr 2021Loop CapitalMaintainsBuy
Mar 2021Wells FargoMaintainsOverweight
Mar 2021CitigroupInitiates Coverage OnBuy

View More Analyst Ratings for LOW
View the Latest Analyst Ratings

 

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Posted-In: Joshua Siber Morgan Stanley Simeon GutmanAnalyst Color Price Target Analyst Ratings

Latest Ratings

StockFirmActionPT
SCYXAegis CapitalMaintains40.0
ARGOBoenning & ScattergoodDowngrades
TLSAZacks Investment ResearchInitiates Coverage On7.5
TOTJP MorganUpgrades
WSOMorgan StanleyMaintains244.0
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