S&P 500   3,901.36
DOW   31,261.90
QQQ   288.68
S&P 500   3,901.36
DOW   31,261.90
QQQ   288.68
S&P 500   3,901.36
DOW   31,261.90
QQQ   288.68
S&P 500   3,901.36
DOW   31,261.90
QQQ   288.68

O’Reilly Automotive Hits A Pothole

Friday, April 29, 2022 | Thomas Hughes
O’Reilly Automotive Hits A Pothole

Analysts Buy The Dip In O’Reilly Automotive

Shares of O’Reilly Automotive (NASDAQ: ORLY) tanked after the company released its Q1 earnings but some are welcoming the news. Analysts Michael Lasser of UBS urged the company’s client to use the pullback as a buying opportunity due to the strength of industry trends. The stock is falling because O’Reilly Automotive’s results missed the consensus mark, the takeaway however is that seasonally expected volatility cut into the results and the guidance remains unchanged. 

“We believe that recovering mobility and limited new car sales will support industry trends,” Lasser wrote. “As such, we would take advantage of a pullback.”

Lasser and UBS have a Buy rating on the stock with a target of $790 compared to the weak Buy and $730 target indicated by the Marktbeat.com consensus. UBS is the only sell-sider to come out with commentary so far but the trend is up. There have been a series of upgrades and price target increases since the first of the year.

O’Reilly Automotive Misses On The Top And Bottom Lines 

O’Reilly Automotive had a good quarter and produced growth, just not as much as the analysts were expecting but the margin of error is slim. The company reported $3.3 billion in consolidated revenue for a gain of 6.8% but missed the consensus by 60 basis points. The miss is not a good thing to see but not as important as growth in general and the fact comps are up 29.6% in the two-year stack. 

“Historically, our first quarter can be volatile, as we see weather impacts from winter conditions early in the quarter and the timing of the onset of spring at the end. This year was no exception, and we saw choppiness in our business that coincided with inclement weather at the beginning of our quarter and the slow start to spring, along with other macroeconomic pressures,” says Greg Johnson, O’Reilly Automotive CEO. 

The earnings news is equally mixed with gross and operating margins falling versus last year.  The gross margin contracted by 130 basis points and the operating margin by 210 and both more than expected. The declines are due to sales leverage and inflation as well as internal efforts to boost growth and should be recovered in the next few quarters. The bad news in regards to earnings is that GAAP earnings of $7.17 fell short by $0.34, the good news is that earnings grew 2% YOY and are up 34% in the two-year stack. As for guidance, the revenue and margin guidance was reaffirmed at the previous levels. 

The Technical Outlook: Someone Is Buying The Dip In O’Reilly Automotive 

Price action in O’Reilly Automotive fell about 10% in the wake of the earnings release and hit the lowest levels since February. The move was met by buyers, however, and price action rebounded strongly from the low. This action is most likely supported by repurchase activity as well because O’Reilly is an active share repurchaser and has $1.2 billion in funds available for purchases. In the near-term, price action may retest the recent low but we would expect to see it bounce again. Longer-term, price action may move sideways within the range of $620 to $660 until the next earnings report is released. 

O’Reilly Automotive Hits A Pothole

O'Reilly Automotive is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.

Should you invest $1,000 in O'Reilly Automotive right now?

Before you consider O'Reilly Automotive, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and O'Reilly Automotive wasn't on the list.

While O'Reilly Automotive currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
O'Reilly Automotive (ORLY)
2.4802 of 5 stars
Compare These Stocks  Add These Stocks to My Watchlist 


Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau MarketBeat is rated as Great on TrustPilot

© American Consumer News, LLC dba MarketBeat® 2010-2022. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information | RSS Feeds

© 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.