Advance Auto Parts, Inc. (NYSE:AAP): Stock in Spotlight

The shares of Advance Auto Parts, Inc. (NYSE:AAP) currently has mean rating of 2.46 while 6 analysts have recommended the shares as “BUY”, 5 recommended as “OUTPERFORM” and 13 recommended as “HOLD”. The rating score is on a scale of 1 to 5 where 1 stands for strong buy and 5 stands for sell.

The company’s mean estimate for sales for the current quarter ending June-16 is 2.24 billion by 18 analysts. The means estimate of sales for the year ending Dec-16 is 9.39 billion by 24 analysts.

The mean price target for the shares of Advance Auto Parts, Inc. (NYSE:AAP) is at 160.24 while the highest price target suggested by the analysts is 210.00 and low price target is 120.00. The mean price target is calculated keeping in view the consensus of 17 brokerage firms.

The average estimate of EPS for the current fiscal quarter for Advance Auto Parts, Inc. (NYSE:AAP) stands at 2.10 while the EPS for the current year is fixed at 7.85 by 26 analysts.

The next one year’s EPS estimate is set at 8.81 by 27 analysts while a year ago the analysts suggested the company’s EPS at 7.85. The analysts also projected the company’s long-term growth at 11.17% for the upcoming five years.

In its latest quarter ended on 31^st March 2016, Advance Auto Parts, Inc. (NYSE:AAP) reported earnings of $2.51. The posted earnings missed the analyst’s consensus by -$0.09 with the surprise factor of -3.50%. In the matter of earnings surprises, the term “Cockroach Effect” is often implied. Cockroach Effect is a market theory that suggests that when a company reveals bad news to the public, there may be many more related negative events that have yet to be revealed. In the case of earnings surprises, if a company is suggesting a negative earnings surprise it means there are more to come.

On May 19, 2016 Advance Auto Parts, Inc. (NYSE:AAP) announced its financial results for the first quarter ended April 23, 2016. First quarter adjusted earnings per diluted share (Adjusted Cash EPS) were $2.51.

1. Fiscal 2016 and 2015 include certain non-operational expenses. The Adjusted SG&A, Adjusted Operating Income and Adjusted Cash EPS for the sixteen weeks ended April 23, 2016 and April 25, 2015, respectively, have been reported on an adjusted basis to exclude General Parts integration, store consolidation costs and support center restructuring costs of $31.4 million and $32.7 million, respectively, and General Parts amortization of acquired intangible assets of $12.7 million and $13.0 million, respectively. For a better understanding of the Company’s adjusted results, refer to the presentation of the respective financial measures on a GAAP basis and reconciliation of the financial results reported on an adjusted basis to the GAAP basis in the accompanying financial tables in this press release.

“Our first quarter results did not meet our expectations,” said Tom Greco, Chief Executive Officer. “We are moving forward with urgency to drive improved performance. Our customers are our top priority and we are elevating our intensity to get the right parts to the right place at the right time as we empower our team members to serve the customer better than anyone else.”

Greco continued, “I have been energized by the strength and the quality of our team and the opportunity that lies ahead. I am confident our focus and commitment around delivering improved service for our customers will translate into increased profitability and shareholder value.”