Advance Auto Parts' (AAP) future direction hinges on the implementation of its transformation strategy and achieving revenue growth, UBS said in a note Friday.
The investment firm expects the stock to be rangebound as the market awaits evidence of progress in the execution of the company's plan to transform itself following its Q4 results and latest update, which were perceived to be underwhelming.
"The retailer will need to simultaneously implement various new merchandising strategies, operating enhancements and supply chain developments," UBS said.
While bullish investors think the company is making "solid progress" on several persistent issues, the firm said the bearish ones are holding their ground and convinced that the company "can't avoid inevitable new issues coming in the future and overshadowing progress made elsewhere."
UBS trimmed its price target to $42 from $44, while maintaining a neutral rating on the stock.
Price: 36.25, Change: -0.71, Percent Change: -1.92
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