AAP - Advance Auto Parts downgraded as Roth MKM highlights market share losses

Advance Auto Parts ( NYSE: AAP ) stock slipped in premarket trading on Monday as Roth MKM analyst David Bellinger stepped to the sidelines.

Bellinger told clients that strong results from key competitors in recent earnings reports has highlighted execution errors, leaving him unable to recommend the stock. Instead, he advised that AutoZone ( AZO ) and O’Reilly Automotive ( ORLY ) appear to be “steadier operators” in the current environment.

“Following an impressive Q4 print from O’Reilly ( ORLY ) and outlook for extended comp gains, we can no longer dismiss the serial underperformance of AAP. Market share seems to be unwinding quickly as competitor pricing actions season,” Bellinger wrote on Monday. “We find it difficult to underwrite a material margin recovery from here.”

Both AutoZone ( AZO ) and O’Reilly Automotive ( ORLY ) are Buy-rated as compared to a new Neutral rating on Advance Auto Parts ( AAP ). Bellinger also trimmed his price target on Advance Auto Parts to $140 from a prior $180. Shares of Advance Auto Parts slid about 1% shortly before Monday’s market open.

Read more on the earnings expectations for the company’s upcoming Q4 report .

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