On Thursday, O'Reilly Automotive (NASDAQ:ORLY) received a reiterated Buy rating and a $1,260.00 price target from Jefferies. The automotive parts retailer reported third-quarter earnings per share (EPS) of $11.41, which fell short of the consensus estimate of $11.54 but exceeded the Jefferies estimate of $11.27. Comparable store sales saw a 1.5% increase, which was below the expected 2.5%.
The company has adjusted its 2024 guidance, reducing its EPS forecast, excluding additional buybacks, to a range of $40.60 to $41.10, down from the previous $40.75 to $41.25. Comparable store sales projections were also revised to a 2-3% increase, compared to the earlier 2-4% estimate. Sales forecasts have been narrowed to $16.6 billion to $16.8 billion, slightly lower than the prior range of $16.6 billion to $16.9 billion.
In the recent quarter, O'Reilly Automotive repurchased approximately 500,000 shares for $541 million, averaging $1,084.28 per share. Post-quarter-end, around 100,000 additional shares were bought back at an average price of $1,170.55 per share, costing $70 million. The company generated roughly $500 million in free cash flow during the quarter, a decrease from $564 million in the previous year.
The report also included details on the company's financial health. Accounts payable as a percentage of inventory dropped 450 basis points year-over-year to 129.4%. The trailing twelve-month adjusted debt to EBITDAR ratio saw a slight increase to 1.96 times, up from 1.93 times in the prior year.
Moreover, the average inventory per store rose by 3.0% year-over-year to $781,000. O'Reilly Automotive concluded the quarter with $115.6 million in cash and cash equivalents. Further information is anticipated to be shared in the company's conference call at 11 AM ET on Friday.
In other recent news, O'Reilly Automotive has reported third-quarter earnings and revenue that did not meet analyst expectations. The auto parts retailer posted adjusted earnings per share of $11.41, falling short of the consensus estimate of $11.54. Revenue came in at $4.36 billion, which was below analysts' projections of $4.43 billion.
Despite these results, the company did see a 4% YoY increase in revenue and a 1.5% growth in comparable store sales. In light of these developments, O'Reilly Automotive has revised its full-year comparable store sales guidance to 2-3% from the previous range of 2-4%, and it now expects fiscal 2024 earnings per share between $40.60 and $41.10. Full-year revenue is projected at $16.6-16.8 billion, slightly below analyst estimates.
DA Davidson maintained a Buy rating on O'Reilly Automotive, with a steady price target of $1,275.00. Despite the challenging quarter, O'Reilly Automotive reported continued market share gains in its professional business and opened 47 new stores across its operations in the U.S., Mexico, and Canada. The company also repurchased $541 million worth of its stock in the third quarter.
InvestingPro Insights
To complement the recent earnings report and guidance adjustment from O'Reilly Automotive, InvestingPro data provides additional context for investors. The company's market capitalization stands at $69.56 billion, reflecting its significant presence in the automotive parts retail sector. Despite the slight miss on EPS expectations, O'Reilly maintains a strong financial position with a revenue of $16.28 billion over the last twelve months as of Q2 2024, showing a growth of 6.99%.
InvestingPro Tips highlight that O'Reilly is trading near its 52-week high, with a price that is 98.2% of its peak. This aligns with the company's robust 1-year price total return of 37.53%, outperforming many market benchmarks. However, investors should note that the stock is trading at a high P/E ratio of 29.89 relative to its near-term earnings growth, which may be a consideration given the revised guidance.
For those seeking a deeper analysis, InvestingPro offers 13 additional tips for O'Reilly Automotive, providing a more comprehensive view of the company's financial health and market position.
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