11:45 AM EDT, 08/14/2025 (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 raise our 12-month target by $5 to $40, based on a FY 26 P/E of 14.5x, a justified discount to AAP's 5-year mean forward P/E of 18.4x. We raise our adjusted EPS estimates to $1.80 from $1.50 for FY 25 and to $2.75 from $2.60 for FY 26. AAP lowered prior FY 25 adjusted EPS guidance to $1.20-$2.20 from $1.50-$2.50, the midpoint of which ($1.70) was below the consensus of $1.85. The cut was due to higher interest expense expectations following the recent completion of a senior notes offering. We see downside risks to the new guidance, particularly its same store sales growth and operating margin outlook, given first-half results that came in comfortably below the low end of its full-year ranges. Moreover, we continue to question AAP's decision to move forward with building new stores (30 in 2025 and an additional 100 by the end of 2027) after shutting down 514 underperforming stores in the first half of the year, which should act as an ongoing drag on free cash flow and cash returns to shareholders.