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Missouri-headquartered O'Reilly Automotive (ORLY) is a leading retailer in the automotive aftermarket industry, known for its wide range of parts, tools, and accessories. Valued at a market cap of $65.9 billion, it serves both professional mechanics and DIY customers, offering expert advice and top-tier customer service.
Companies valued at $10 billion or more are generally considered "large-caps," and O'Reilly Automotive fits this criterion perfectly, signifying its substantial size, stability, and influence in the automotive aftermarket industry.
O'Reilly Automotive leverages a dual market strategy, serving both DIY customers and professional service providers, providing a broad customer base and stability against market shifts. Additionally, O'Reilly's strategic hub-and-spoke distribution system, with 30 regional centers and 385 hub stores, ensures rapid access to 152,000 SKUs, enhancing parts availability, customer loyalty, and sales.
ORLY shares are trading 3.9% below their 52-week high of $1,169.11, which they hit on Mar. 21. Also, the stock has soared 14.9% over the past three months, outperforming the broader Nasdaq Composite’s ($NASX) 1.5% fall over the same time frame.
Longer term, ORLY is up 18.3% on a YTD basis, and the shares have gained 17.3% over the past 52 weeks. In comparison, the NASX has gained 12.5% in 2024 and 22.7% over the past year.
Despite the mixed price action, ORLY has been trading above its 50-day moving average since mid-June and over its 200-day moving average since early July, indicating a bullish trend.
O'Reilly Automotive's gains this year are driven by strategic moves, including its expansion into Canada through the January 2024 acquisition of Groupe Del Vasto, a leading auto parts distributor. This provides O'Reilly with a strong distribution network and a solid foothold in the Canadian market.
Moreover, ORLY’s shares rose 4% after its Q2 earnings release on Jul. 24, despite missing estimates on both earnings and revenue. The stock surge was driven by impressive year-over-year growth in revenue, earnings, and comparable store sales.
O'Reilly Automotive faces strong competition from AutoZone (AZO), which is known for its extensive product range and store network. AutoZone has outperformed ORLY with a 20.7% gain on a YTD basis. However, it has lagged behind the broader market over the past year with a 19.1% return.
Analysts are moderately optimistic about ORLY’s prospects. The stock has a consensus rating of "Moderate Buy" from 22 analysts in coverage. The mean price target of $1,189.95 reflects a 5.9% premium from current price levels.
On the date of publication, Kritika Sarmah 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.
