Advance Auto Parts Standing Still - Analyst Blog
Advance Auto Parts, Inc. (
AAP) is a specialty retailer of automotive parts, accessories, and maintenance items. The company caters to the do-it-yourself (DIY) and do-it-for-me (DIFM) customers. Though it is generating top-line growth by opening new stores, the company currently faces a challenging industry environment.
To combat the difficult industry metrics, the company has reviewed its business strategies to drive sales, lower costs, and increase return on invested capital (ROIC). AAP expects increased investments and fuel costs to constrain profit growth in 2008.
Thus, we are maintaining a Hold recommendation until costs are contained and same-store sales improve. We set a six-month target price of $27.00.
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