12:10 PM EDT, 05/24/2024 (MT Newswires) -- Advance Auto Parts ( AAP ) faces "another soft quarter" as the company attempts to steady operations in a "challenging demand environment," Wedbush said Friday in a report.

The company is expected to report Q1 results Wednesday.

"Some speculate that the company could announce the sale of Worldpac in conjunction with the results, but we are not so sure," Wedbush said. Some investors argue that proceeds from the sale of the aftermarket replacement automotive parts distributor may bolster Advance Auto's financial position, or a deal might highlight the "gross underperformance" of the core "blended box" business, the report said.

Supply chain improvements face high costs and challenges, and selling a business unit might be needed for capital, despite drawbacks, the note said.

Soft Q1 sales at rivals O'Reilly Auto (ORLY) and AutoZone ( AZO ) and key customer Monro ( MNRO ) indicate downside risk for Advance Auto's prospects.

Wedbush has a neutral rating on Advance Auto with a 12-month price target of $70.

Price: 70.48, Change: +1.06, Percent Change: +1.53