Market Overview

Argus Says Advance Auto Parts' New CEO Is 'The Right Executive For The Job'

Argus Says Advance Auto Parts' New CEO Is 'The Right Executive For The Job'

Argus is positive on Advance Auto Parts, Inc. (NYSE: AAP)'s hiring of Tom Greco as CEO, as it thinks he "is the right executive for the job." The brokerage's analysts commented, "[H]e will deliver operating improvements that will be a catalyst for the shares."

Argus maintains its Buy rating and $185 price target, saying the company has the ability to fix its operating problems and generate significant shareholder value.

Although the brokerage is not expecting an overnight turnaround, it expects to see a "succession of small victories over the next year, with a strong focus on product availability and in-stock levels."

"We believe that under the watchful eye of the new AAP Chairman, noted activist investor Jeffrey C. Smith, the CEO of Starboard Value, AAP's new CEO Tom Greco will apply his expertise from a 30-year career at PepsiCo, Inc. (NYSE: PEP) to make AAP a more efficient and customer-focused company," analyst Christopher Graja wrote in a note.

Related Link: The Retail Earnings Season Roundup: All The Results In 1 Place

However, Graja cut his 2016 adjusted earnings estimate to $7.35 per share from $7.85, driven by lower-than-expected second-quarter earnings and a lower gross margin on the expectation of additional supply-chain spending. The current full-year consensus EPS estimate is $7.37.

The analyst also cut his third quarter EPS forecast to $1.78 from $1.99 and trimmed fourth quarter estimate to $1.14 from $1.25.

That said, the analyst continues to see upside for the shares, which is currently up 0.63 percent to $157.66 on Wednesday.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for AAP

Aug 2019MaintainsBuy
Aug 2019MaintainsOverweight
Aug 2019MaintainsOutperform

View More Analyst Ratings for AAP
View the Latest Analyst Ratings

Posted-In: Analyst Color Long Ideas News Price Target Reiteration Management Analyst Ratings Trading Ideas Best of Benzinga


Related Articles (AAP + PEP)

View Comments and Join the Discussion!

JPMorgan Declares Ctrip The Winner Of China's Travel Market Consolidation

Technical Alert: Ambarella Inc. Succumbs To Profit-Taking