Truist Securities Raises Price Target on O'Reilly Automotive to $1,468 From $1,313, Maintains Buy Rating

O'Reilly Automotive has an average rating of overweight and mean price target of $1,370.11, according to analysts polled by FactSet.

O'Reilly Automotive has an average rating of overweight and mean price target of $1,370.11, according to analysts polled by FactSet.

O'Reilly Automotive's "conservative" 2025 outlook leaves "ample room" for the company to outperform throughout the year, UBS Securities said in a Thursday note.

The auto parts retailer reported Q4 diluted earnings Wednesday of $9.50 per share and $4.1 billion in revenue, and issued 2025 guidance of $42.60 to $43.10 in EPS on revenue of $17.4 billion to $17.7 billion. UBS said it believes the Q4 results "did not present any significant surprises," and described the full-year outlook as "prudent."

UBS noted that the company's Q4 comparable store sales growth of 4.4% broke the streak of underperformance over the past three quarters. UBS said this momentum is likely to extend through the next quarters, adding that O'Reilly Automotive remains "well positioned" for EPS growth in 2025.

UBS Securities has a buy rating on O'Reilly Automotive and a price target of $1,400.

O’Reilly Automotive, Inc. ORLY reported fourth-quarter 2024 adjusted earnings per share (EPS) of $9.96, which beat the Zacks Consensus Estimate of $9.71. The bottom line also increased from $9.26 reported in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $4.10 billion, surpassing the Zacks Consensus Estimate of $4.03 billion. The top line also increased 7% year over year.

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During the quarter, comparable store sales grew 4.4%. The company opened 87 new stores in the United States, Mexico and Canada during the quarter. The total store count was 6,378 as of Dec. 31, 2024.

O'Reilly Automotive, Inc. Price, Consensus and EPS Surprise

O'Reilly Automotive, Inc. price-consensus-eps-surprise-chart | O'Reilly Automotive, Inc. Quote

Financials, Share Repurchase & Costs

In the reported quarter, selling, general and administrative expenses rose 8.8% year over year to $1.36 billion. Operating income rose 2.7% year over year at $738.7 million. Net income was $551.1 million, down from $552.5 million in the year-ago quarter.

During the reported quarter, O’Reilly repurchased 0.4 million shares for $472 million at an average price of $1,207.43 per share. After the end of the quarter until the release date, ORLY repurchased an additional 0.1 million shares of common stock for a total investment of $181 million at an average price of $1,232.37 per share. As of Feb. 5, the company had nearly $2.31 billion remaining under the current share repurchase authorization.

It had cash and cash equivalents of $130.2 million at the end of the reported quarter, down from $279.1 million recorded as of 2023-end. Its long-term debt was $5.52 billion, lower than $5.57 billion as of Dec. 31, 2023.

During the reported quarter, O’Reilly generated $624.4 million in cash from operating activities compared with the year-ago period’s $516.4 million. Capital expenditures totaled $290.5 million compared with $252.3 million in the year-ago period. Free cash flow was $330.7 million, up 29.2% year over year.

ORLY Provides 2025 Outlook

For 2025, O’Reilly estimates total revenues in the range of $17.4-$17.7 billion compared with $16.7 billion reported in 2024. It expects earnings per share in the range of $42.60-$43.10 compared with $40.66 reported in 2024. Comparable store sales are estimated to grow 2-4% compared to 2.9%. The outlook for free cash flow is anticipated to be between $1.6 billion and $1.9 billion. Capital expenditure guidance is expected to be in the range of $1.2-$1.3 billion. The company intends to open 200-210 stores this year.

Zacks Rank & Other Key Picks

ORLY carries a Zacks Rank #2 (Buy) at present.

Some other top-ranked stocks in the auto space are Geely Automobile Holdings Limited GELYY, Allison Transmission Holdings, Inc. ALSN and Yamaha Motor Co., Ltd. YMHAY. While GELYY sports a Zacks Rank #1 (Strong Buy), ALSN & YMHAY carry a Zacks Rank #2 each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GELYY’s fiscal 2025 sales and earnings suggests year-over-year growth of 66.62% and 149.31%, respectively. EPS estimates for fiscal 2025 and 2026 have improved by 15 cents and 38 cents, respectively, in the past 60 days.

The Zacks Consensus Estimate for ALSN’s 2025 sales and earnings suggests year-over-year growth of 6.67% and 11.40%, respectively. EPS estimates for 2025 have improved 3 cents in the past 30 days.

The Zacks Consensus Estimate for YMHAY’s 2025 sales and earnings suggests year-over-year growth of 8.69%and 19.07%, respectively. EPS estimates for 2025 have improved by a penny in the past 60 days.

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