LKQ (NASDAQ:LKQ) Issues Earnings Results, Meets Expectations

Key Points

• LKQ reported Q1 EPS of $0.67, matching consensus, with revenue of $3.47B (up 4.3% YoY but slightly below expectations) and updated FY‑2026 guidance to $2.90–$3.20 adjusted EPS.
• Management said North America is stabilizing—Q1 organic revenue was down only 0.5% per‑day, repairable claims improved ~2–4% and alternative‑parts utilization is near a record ~40%—while Europe showed late‑Q1 improvement and an ERP conversion that should enable future cost and integration benefits.
• The board launched a formal strategic review with Bank of America and Goldman Sachs to evaluate value‑creating alternatives, and maintains disciplined capital allocation with total debt around $3.9B, a $0.30 quarterly dividend paid, plans to resume buybacks, and FY free cash flow guidance of $700M–$850M.

LKQ (NASDAQ:LKQ - Get Free Report) issued its earnings results on Thursday. The auto parts company reported $0.67 earnings per share for the quarter, hitting analysts' consensus estimates of $0.67, Zacks reports. The firm had revenue of $3.47 billion during the quarter, compared to analysts' expectations of $3.54 billion. LKQ had a net margin of 4.36% and a return on equity of 12.29%. The firm's revenue for the quarter was up 4.3% compared to the same quarter last year. During the same period last year, the firm posted $0.79 earnings per share. LKQ updated its FY 2026 guidance to 2.900-3.200 EPS.

Here are the key takeaways from LKQ's conference call:

• North America showed clear signs of stabilization with Q1 organic revenue down only 0.5% per-day (improved vs prior year), repairable claims improving ~2–4%, and alternative-parts utilization near a record ~40%, which management expects to help drive share and margin recovery.
• Management reaffirmed full-year guidance of organic parts & services revenue -0.5% to +1.5%, adjusted EPS $2.90–$3.20, and free cash flow $700M–$850M, while Q1 adjusted EPS was $0.67 (GAAP $0.30 includes a $0.17/share Mekonomen impairment).
• LKQ launched a formal strategic review with Bank of America and Goldman Sachs to evaluate value-creating alternatives (including the previously marketed Specialty business), but the process is early and timing is uncertain due to tighter credit conditions for potential buyers.
• Europe showed month-over-month improvement late in Q1, with private-label penetration up to 25.3% (management plans phased price increases toward 2027) and a recently completed ERP conversion that caused temporary disruption but is expected to enable future cost and integration benefits.
• Balance sheet and capital allocation remain disciplined — total debt ~$3.9B (2.6x leverage), a $500M term loan to be refinanced or extended, a $77M dividend paid in Q1, and management expects to resume share buybacks while delivering strong full-year free cash flow.

LKQ Stock Up 3.0%

Shares of NASDAQ:LKQ traded up $0.92 during trading on Thursday, reaching $31.58. 4,459,400 shares of the company traded hands, compared to its average volume of 2,644,249. The firm has a fifty day simple moving average of $30.57 and a 200 day simple moving average of $31.03. The firm has a market cap of $8.06 billion, a P/E ratio of 13.38 and a beta of 0.91. LKQ has a 1-year low of $27.64 and a 1-year high of $42.67. The company has a quick ratio of 0.58, a current ratio of 1.67 and a debt-to-equity ratio of 0.55.

LKQ Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Thursday, March 26th. Shareholders of record on Thursday, March 12th were paid a dividend of $0.30 per share. The ex-dividend date of this dividend was Thursday, March 12th. This represents a $1.20 dividend on an annualized basis and a dividend yield of 3.8%. LKQ's dividend payout ratio (DPR) is 50.85%.

Key Headlines Impacting LKQ

Here are the key news stories impacting LKQ this week:

• Positive Sentiment: Q1 revenue outperformed expectations as pricing and a stronger sales mix offset softer unit volumes, showing underlying demand resilience. However, Zacks notes margins face pressure from tariffs, costs and weaker claims demand. Read More.
• Positive Sentiment: The board initiated a comprehensive review of strategic alternatives to enhance shareholder value — a catalyst that can drive M&A, divestiture or other value-realization actions and often supports the stock on hopes of a premium outcome. Read More.
• Neutral Sentiment: Earnings per share came in at $0.67, essentially meeting consensus, while revenue was up modestly year-over-year (about +4.3%). The print confirms steady top-line growth but shows EPS pressure versus the prior year. Read More.
• Negative Sentiment: FY‑2026 EPS guidance was set at $2.90–$3.20, slightly below the Street midpoint (~$3.03), which tempers upside and suggests margin pressure or slower upside than analysts hoped. That guidance likely explains some caution among investors despite the revenue beat. Read More.
• Negative Sentiment: Multiple law firms and shareholder-alert services have filed or are soliciting investors for securities class actions covering purchases between Feb 27, 2023 and July 23, 2025; litigation risk and potential settlements or disclosures are a near-term overhang. Read More.

Institutional Investors Weigh In On LKQ

A number of institutional investors have recently modified their holdings of the stock. Kennedy Capital Management LLC raised its holdings in shares of LKQ by 41.2% during the 3rd quarter. Kennedy Capital Management LLC now owns 314,467 shares of the auto parts company's stock valued at $9,604,000 after purchasing an additional 91,776 shares in the last quarter. State of Tennessee Department of Treasury raised its holdings in shares of LKQ by 152.3% during the 4th quarter. State of Tennessee Department of Treasury now owns 78,360 shares of the auto parts company's stock valued at $2,574,000 after purchasing an additional 47,299 shares in the last quarter. Empowered Funds LLC bought a new position in shares of LKQ during the 1st quarter valued at $1,162,000. Captrust Financial Advisors raised its holdings in shares of LKQ by 20.7% during the 4th quarter. Captrust Financial Advisors now owns 102,544 shares of the auto parts company's stock valued at $3,097,000 after purchasing an additional 17,605 shares in the last quarter. Finally, Verity Asset Management Inc. bought a new position in shares of LKQ during the 3rd quarter valued at $413,000. Institutional investors and hedge funds own 95.63% of the company's stock.

Analysts Set New Price Targets

LKQ has been the subject of a number of research reports. Weiss Ratings restated a "sell (d+)" rating on shares of LKQ in a report on Friday, March 27th. Zacks Research cut shares of LKQ from a "hold" rating to a "strong sell" rating in a report on Monday, January 26th. Barclays reduced their price target on shares of LKQ from $34.00 to $33.00 and set an "equal weight" rating for the company in a research report on Tuesday, April 7th. Wall Street Zen downgraded shares of LKQ from a "buy" rating to a "hold" rating in a research report on Sunday, February 22nd. Finally, JPMorgan Chase & Co. reduced their price target on shares of LKQ from $40.00 to $37.00 and set an "overweight" rating for the company in a research report on Monday, February 23rd. Five analysts have rated the stock with a Buy rating, one has assigned a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat, LKQ presently has an average rating of "Hold" and an average price target of $42.33.

LKQ Company Profile

LKQ Corporation is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. The company supplies a broad range of replacement components, including recycled original equipment manufacturer (OEM) parts, aftermarket parts, refurbished and remanufactured items. Its products support collision repair, mechanical repair and performance enhancement needs across passenger cars, heavy trucks and recreational vehicles.

Through a combination of in-house operations and strategic acquisitions, LKQ has developed a comprehensive product portfolio that extends beyond core replacement parts.

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