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O'Reilly (ORLY) To Gain From New Outlets, High Costs Ail

By Zacks Investment ResearchStock MarketsDec 11, 2017 09:23PM ET
www.investing.com/analysis/oreilly-orly-to-gain-from-new-outlets-high-costs-ail-200272481
O'Reilly (ORLY) To Gain From New Outlets, High Costs Ail
By Zacks Investment Research   |  Dec 11, 2017 09:23PM ET
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On Dec 11, we issued an updated research report on O'Reilly Automotive Inc. (NASDAQ:ORLY) .

O'Reilly’s reported adjusted earnings per share of $3.22 for third-quarter fiscal 2017 surpassed the Zacks Consensus Estimate of $3.15. Quarterly revenues rose 5.4% year over year to $2.34 billion. The top line was almost on par with the Zacks Consensus Estimate. The company has also provided guidance for fiscal 2017.

For fiscal 2017, the company expects earnings per share in the band of $11.82-$11.92 against the previous guidance of $11.77-$11.87. In fiscal 2016, the metric came in at $10.73.

O'Reilly Automotive, Inc. Price and Consensus

Revenues for 2017 are anticipated in the range of $8.9-$9 billion compared with the previous expectation of $8.9-$9.1 billion. In fiscal 2016, total revenues were $8.6 billion.

Further, the company projects a consolidated comparable store sales increase in the range of 1-2% during the year.

O'Reilly’s stock has seen the Zacks Consensus Estimate for annual earnings being revised 0.08% upward over the last seven days.

The company is poised to benefit from store openings in the existing markets and new, contiguous markets. In the first nine months of fiscal 2017, O'Reilly unveiled 162 new stores across its markets. Further, in 2018, it has plans to open 200 more outlets.

The company also boasts a strong distribution network. O'Reilly’s dual-market stores are more dynamic and provide the company with the scope to operate in smaller markets.

However, high fixed costs, increasing wage rates and growing investments have lead to an expenditure rise for the company. Also, a huge inventory is hampering the short-term liquidity of O'Reilly in periods of low sales.

Price Performance

In the last three months, shares of O'Reilly have outperformed the industry it belongs to. The stock has rallied 18.9% compared with the industry’s gain of 12.2% during the period.



Zacks Rank & Key Picks

O'Reilly carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are BorgWarner Inc. (NYSE:BWA) , BMW AG BAMXF and Navistar International Corporation (NYSE:NAV) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BorgWarner has an expected long-term growth rate of 9%. In the last six months, shares of the company have been up 21.9%.

BMW has an expected long-term growth rate of 4.2%. Over a year, shares of the company have been up 5.7%.

Navistar has an expected long-term growth rate of 5%. In the last 30 days, shares of the company have been up 1.6%.

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Bayerische Motoren Werke AG (BAMXF): Free Stock Analysis Report

O'Reilly Automotive, Inc. (ORLY): Free Stock Analysis Report

BorgWarner Inc. (BWA): Free Stock Analysis Report

Navistar International Corporation (NAV): Free Stock Analysis Report

Original post

Zacks Investment Research

O'Reilly (ORLY) To Gain From New Outlets, High Costs Ail
 

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O'Reilly (ORLY) To Gain From New Outlets, High Costs Ail

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