AAP - Advance Auto Parts dips after Argus pulls bull rating
2023-03-13 09:02:04 ET
Argus cut its rating on Advance Auto Parts Inc. ( NYSE: AAP ) on Monday to Hold from Buy.
Analyst Taylor Conrad warned the auto retailer has struggled to expand margins due chiefly to the inflation and currency headwinds it is facing. Of note, AAP has also paused stock buybacks based on expectations for higher interest payments and inventory investments. So far, AAP has not announced a dividend increase this year either.
Conrad also pointed out that AAP is facing management uncertainty as the search for a new CEO progresses and an accounting change could be a factor in how the stock is valued.
"Advance Auto is also changing the basis of its guidance, and will now provide forecasts on a GAAP rather than an adjusted basis. This shift may lead to distorted year-over-year comparisons in the near term.
While Advance Auto Parts ( AAP ) is expected to continue to benefit from the increase in the average age of vehicle and from higher comparable sales as it expands its omnichannel capabilities, the macro backdrop and bearish technical setup keep Argus on the sidelines for now.
Shares of Advance Auto Parts ( AAP ) fell 2.35% in premarket action on Monday.
Read some recent breakdowns on Advance Auto Parts from Seeking Alpha contributors.
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Advance Auto Parts dips after Argus pulls bull rating