/LKQ%20Corp%20laptop%20and%20phone%20by-%20T_Schneider%20via%20Shutterstock.jpg)
Chicago-based LKQ Corporation (LKQ) is a leading provider of alternative and specialty parts to repair and accessorize vehicles. With a market cap of $10.4 billion, LKQ operates through wholesale-North America, Europe, specialty, and self-service segments.
Companies worth $10 billion or more are generally described as "large-cap stocks," LKQ fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the auto parts industry. It offers a wide range of replacement systems, components, and equipment for automobiles, trucks, and recreational vehicles.
LKQ touched its 52-week high of $53.68 on Mar. 28 and is now trading 25.3% below that peak. LKQ has dipped 3.7% over the past three months, lagging behind the Dow Jones Industrials Average’s ($DOWI) 7.8% gains during the same time frame.
Over the longer term, LKQ declined 16.1% in 2024 and 18.1% over the past 52 weeks, substantially underperforming the DOWI’s 11.9% gains on a YTD basis and 25.5% returns over the past year.
To confirm the bearish trend, LKQ has traded below its 200-day moving average over the past year and below its 50-day moving average since mid-April with slight fluctuations.
Shares of LKQ plummeted 12.4% after the release of its Q2 earnings on Jul. 25. Although the company reported a solid 7.6% year-over-year revenue growth, reaching $3.7 billion, its profitability margins took a sharp hit due to rising costs. Its cost of goods sold increased by 11.6% to $2.3 billion, leading to a 2.2% gross margin contraction to 38.8%. Due to rising operating and other expenses, its net margin fell by 3.2% to 5%, leading to a 34.2% net income decline to $185 million. Additionally, its adjusted EPS of $0.98 fell short of the consensus estimates by 4.9%, making investors jittery.
LKQ’s competitor, Mobileye Global Inc. (MBLY), declined 65.9% over the past year and 68.2% in 2024, underperforming LKQ.
Among the eight analysts covering the LKQ stock, the consensus rating is a “Strong Buy.” The mean price target of $55.28 suggests a potential upside of 37.9% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
