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LKQ Corporation (LKQ), with a market cap of $10.26 billion, provides alternative and specialty parts to repair and accessorize automobiles and other vehicles. Headquartered in Chicago, Illinois, LKQ offers a broad range of products and services, including recycled and aftermarket automotive parts, remanufactured engines, and refurbished collision repair products.
LKQ shares have underperformed the broader market considerably over the last year. LKQ has declined 27.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 21.7%. Also, in 2024 alone, the stock fell 18.2%, compared to SPX's 13.9% rise on a YTD basis.
Zooming in further, LKQ has underperformed the Consumer Discretionary Select Sector SPDR Fund (XLY) over the past year. The exchange-traded fund has gained 4.9% over this period. The stock's YTD loss is much higher than the ETF’s marginal decline over the same time frame.
On Jul. 25, LKQ reported its Q2 results. Revenue was $3.71 billion, missing analysts' expectations of $3.87 billion. The company’s earnings were $185 million, and its EPS was $0.98, lower than Wall Street estimates of $1.03. LKQ expects full-year earnings between $3.50 to $3.70 per share. The stock declined 12.4% on the day it released earnings.
For the current fiscal year, ending in December, analysts expect LKQ's EPS to decline 6% year over year to $3.60 on a diluted basis. The company's earnings surprise history is mixed. It missed the consensus estimate in three of the last four quarters while beating the forecast on another occasion.
Among the eight analysts covering LKQ stock, the consensus is a “Strong Buy.” That’s based on six “Strong Buy” ratings, one “Moderate Buy,” and one “Hold.”
On Jul. 26, Ryan Brinkman from JPMorgan Chase & Co. (JPM) maintained a “Buy” rating on LKQ, with a price target of $54, implying a potential upside of 38.1% from current levels.
The mean price target of $55.14 represents a 41% premium to LKQ’s current price levels. The Street-high price target of $60 suggests an upside potential of 53.4%.
On the date of publication, Rashmi Kumari 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.
