NEW YORK (TheStreet) -- UBS raised its target price on Advance Auto Parts (AAP) to $145 and set a "buy" rating. The firm also raised its estimates through 2016 and cited improved core execution as a reason for the increase.
The stock was rising 0.62% to $125.63 shortly after the market opened on Friday.
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 solid stock price performance, growth in earnings per share, revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 56.67% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AAP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- ADVANCE AUTO PARTS INC has improved earnings per share by 17.4% 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 $5.22 versus $5.12 in the prior year. This year, the market expects an improvement in earnings ($5.46 versus $5.22).
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 4.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for ADVANCE AUTO PARTS INC is rather high; currently it is at 53.35%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.83% trails the industry average.
- The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.32 is very weak and demonstrates a lack of ability to pay short-term obligations.
- You can view the full analysis from the report here: AAP Ratings Report