Market Overview

LKQ Corporation May See Its Profits Reduced Due To Brexit


The currency headwinds from Brexit could lower the profits of LKQ Corporation (NASDAQ: LKQ) by 2-3 percent annually, according to a note from Baird.

LKQ, a distributor of vehicle aftermarket parts, generates about 15 percent of pro forma revenue in the UK and approximately 33 percent in Europe (including the UK).

"We believe LKQ guidance is based on a $1.45/£1 and $1.10/€1. Currently, the $/£ rate is closer to $1.37 and €/$ is closer to $1.11. Also, based on our notes, we believe LKQ purchases roughly half of its UK inventory in GBP," analyst Craig Kennison wrote in a note.

With six months to go in 2016 and assuming exchange rates near current levels, the analyst said the event could cut his $1.79 2016 EPS estimate by $0.02-$0.03 on a preliminary basis. Based on similar assumptions for 2017, the Brexit vote could reduce the analyst's $2.09 2017 EPS estimate by $0.03-$0.06.

However, Kennison has an Outperform rating and $36 price target on the stock, saying that the company is benefiting from a secular trend favoring alternative-to-OEM parts.

At time of writing, shares of LKQ fell 5.12 percent to $29.45.

Latest Ratings for LKQ

Jul 2019DowngradesBuyGradually Accumulate
Jul 2019DowngradesOutperformMarket Perform
Mar 2019UpgradesNeutralBuy

View More Analyst Ratings for LKQ
View the Latest Analyst Ratings

Posted-In: Baird Craig KennisonAnalyst Color Reiteration Analyst Ratings


Related Articles (LKQ)

View Comments and Join the Discussion!

Latest Ratings

WENWells FargoMaintains22.0
YUMWells FargoMaintains107.0
QSRWells FargoMaintains70.0
RRGBWells FargoMaintains35.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at