Why Advance Auto Parts is Underperforming

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Gearing Up for Advance Auto Parts’ 2Q17 Earnings PART 1 OF 3

By John Parker  | Aug 12, 2017 8:53 am EDT

Advance Auto Parts’ earnings

Advance Auto Parts (AAP), one of the largest US auto parts retailers, is set to release its 2Q17 earnings on August 15, 2017. Before we begin exploring analysts’ estimates for the company’s upcoming earnings, let’s take a look at its recent stock prices.

Why Advance Auto Parts is Underperforming

Outperforming the broader market

As of August 10, 2017, Advance Auto Parts stock was trading at $106.13, with an approximate -5.2% return in August so far. In 2017, AAP has witnessed a value erosion of ~37.2%, against the S&P 500’s 10.5%(SPY) return. Peers O’Reilly Auto Parts (ORLY) and AutoZone (AZO) have fallen by 29.2% and 33.5%, respectively, on a year-to-date basis. AutoZone may be underperforming due to weakening profit margins and low analyst expectations based on its 2Q earnings. On August 2, 2017, US electric automaker Tesla (TSLA) released its 2Q earnings results. For more on this, read Tesla’s 2Q17 Earnings Review: What Triggered the Buying Spree?

Series overview

In this series, we’ll look at Wall Street analysts’ estimates for Advance Auto Parts’ 2Q17 earnings, revenue, and profit margins. We’ll also explore analysts’ recommendations for the stock prior to its second quarter earnings release.

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