NEW YORK (TheStreet) -- J.P. Morgan increased its price target on Advance Auto Parts (AAP) - Get Report to $140, increased its estimates and set an "overweight" rating. The firm noted management is improving execution.
The stock was up 0.38% to $131.03 at 9:32 a.m. on Friday.
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Separately, TheStreet Ratings team rates ADVANCE AUTO PARTS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ADVANCE AUTO PARTS INC (AAP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, increase in net income, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 2.1%. Since the same quarter one year prior, revenues rose by 47.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ADVANCE AUTO PARTS INC has improved earnings per share by 21.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ADVANCE AUTO PARTS INC increased its bottom line by earning $5.33 versus $5.22 in the prior year. This year, the market expects an improvement in earnings ($7.62 versus $5.33).
- The net income growth from the same quarter one year ago has exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 21.3% when compared to the same quarter one year prior, going from $121.79 million to $147.73 million.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 53.25% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- 48.54% is the gross profit margin for ADVANCE AUTO PARTS INC which we consider to be strong. Regardless of AAP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.97% trails the industry average.
- You can view the full analysis from the report here: AAP Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.