11:25 AM EDT, 05/22/2025 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We increase our 12-month price target by $10 to $35, based on a 2026 P/E of 13.5x, a justified discount to AAP's historic average multiples. We raise our adjusted EPS estimates to $1.50 from $1.25 for '25 and to $2.60 from $2.50 for '26. AAP posted Q1 adjusted EPS of -$0.22 vs. $0.33, well ahead of the -$0.69 consensus. The beat was driven by stronger-than-expected comp store sales and gross margins, as revenue fell 6.9% to $2.58B on a 0.6% decline in comp store sales (consensus = -2.0%). Gross margin contracted 50 bps to 42.9% (160 bps ahead of consensus). AAP maintained its prior FY 25 guidance, including net sales of $8.4B-$8.6B and adj. EPS of $1.50-$2.50 (current consensus: $8.50B and $1.54, respectively). While shares are surging, we maintain Sell, as AAP's leverage ratios continue to deteriorate and we remain skeptical the company can hit its FY 25 guidance, noting its poor track record of meeting its own targets. AAP lowered EPS guidance twice in FY 24 and three times in FY 23.