O'Reilly Automotive (ORLY) expects that the auto aftermarket's growth will reaccelerate in the near future and that easing inflation could help support its core lower-income customer, Wedbush Securities said in a note Wednesday.
The brokerage said it recently hosted a meeting for investors with the aftermarket car parts retailer's management, including its Chief Executive Brad Beckham.
"We came away confident that [O'Reilly Automotive] is still the strongest car in the auto aftermarket, built with capabilities to win and a culture that puts the customer first," Wedbush analysts, including Seth Basham, said in its note to clients. "While we believe that near-term demand trends remain soft, we expect modest improvement in 2025 and are comfortable with our top- and bottom-line 2025 forecasts for ORLY that are only slightly below consensus."
O'Reilly maintained its plans for accelerating 2025 store growth to 200 to 210, indicating a 3% rise from year over year. Wedbush said it sees potential for continued 3% annual store growth "well beyond" next year.
The firm said it continues to be neutral on the O'Reilly stock, with a $1,200 price target, mainly due to "elevated" valuation.
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