LKQ - LKQ Corporation: In Need For A Little Maintenance Itself

2024-07-05 12:43:30 ET

Summary

• LKQ Corporation has seen significant growth since its founding in 1998, driven by a combination of organic growth and dealmaking efforts.
• Despite recent challenges, including a profit warning and leadership succession plans, LKQ Corporation maintains manageable leverage ratios and trades at attractive earnings multiples.
• The company is focused on improving margins and synergies from the Uni-Select deal, with a new CEO leading efforts towards operating excellence and modest long-term growth.

In the spring of last year, I observed that LKQ Corporation ( LKQ ) was on the dealmaking hunt again. The company acquired the underperforming Uni-Select business, at a small discount to its own valuation, with the benefit of hindsight, too small of a discount. The company has seen tougher macro times while impacted by warmer weather and strikes, creating a tougher environment to operate within....

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