Advance Auto Components, Inc. ,AAP) delivered robust outcomes for the quarter ended January 1, 2022, and ended the fiscal yr on a constructive be aware. The outcomes beat each earnings and gross sales estimates and the corporate additionally issued encouraging steering for FY22.
Following the information, shares jumped over 2% through the prolonged buying and selling session. Advance Auto Components is a number one automotive aftermarket components supplier. With a market cap of $13.9 billion, its shares have gained 37.8% over the previous yr.
The corporate reported This autumn adjusted earnings of $2.07 per share, 15 cents greater than analyst estimates of $1.92 per share. That determine was up 35.4% in comparison with final yr’s $1.76 per share.
AAP’s quarterly internet gross sales stood at $2.4 billion, registering a modest 1.3% improve over the year-ago interval. The quantity beat analyst estimates of $2.34 billion. This was aided by an 8.2% improve in comparable same-store gross sales.
For the total fiscal yr 2021, the corporate’s internet gross sales elevated 8.8% to $11 billion, pushed by a ten.7% improve in comparable retailer gross sales. As well as, FY21 adjusted earnings grew 43.8% to $12.02 per share in comparison with FY20.
The corporate’s FY21 working money move got here in at $1.1 billion, rising 14.7% yr over yr, and free money move grew 17.2% to $822.6 million.
In February, the corporate’s board of administrators elevated its current share buyback authorization to $1 billion and even elevated its quarterly money widespread dividend by 50% to $1.50 per share. The dividend will probably be payable on March 18 to shareholders of document on April 1.
President and CEO notes
Delighted with the outcomes, the corporate’s President and CEO, Tom Greco, stated, “As we start 2022, we stay targeted on the disciplined execution of our strategic plan. Whereas we’re nonetheless navigating unsure occasions because it pertains to macroeconomic components together with important inflation, the investments we now have made in diverging our enterprise will proceed to offer a aggressive benefit for Advance.
“We consider these investments, in addition to business tailwinds, corresponding to enhancements in miles pushed and improved ageing fleets will allow us to proceed to drive worthwhile progress and whole shareholder returns,” Greco stated.
Upbeat FY22 Steerage
Based mostly on present enterprise momentum and comparable gross sales progress above the top-end of full-year steering, the corporate delivered an optimistic outlook for full-year fiscal 2022.
For FY22, Advance Auto Components expects to attain internet gross sales of $11.2 to $11.5 billion, marginally greater than the consensus estimate of $11.17 billion. FY22 comparable retailer gross sales are anticipated to develop between 1% and three%.
Equally, adjusted earnings are estimated to be between $13.20 and $13.75 per share, whereas the consensus estimate is pegged at $13.27 per share.
of analysts Opinion
Responding to AAP’s monetary efficiency, Wells Fargo analyst Zachary Fedham lowered the worth goal on the inventory from $245 to $245 (9.2% upside potential) and maintained a maintain ranking.
Fadem stated, “We consider AAP is taking the tough however vital steps to begin a enterprise that we consider has long-term hyper-growth (by means of M&A) and low funding. Whereas the Firm has skilled COVID-driven tailwinds, we consider substantial funding stays and valuations upside in 2022/23 may show to be restricted absent top-line outperformance and important margin enchancment.
General, the inventory has a Reasonable Purchase consensus ranking based mostly on 11 buys and 5 holds. Common Advance Auto Components worth goal of $264.88 is with potential for an upside transfer of 18.1% at present ranges.
The TipRanks Inventory Traders Software reveals that investor sentiment is at present very constructive on Advance Auto Components, with 22.7% of the portfolio tracked by TipRanks rising their publicity to AAP inventory over the previous 30 days.
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