O'Reilly Automotive (ORLY) is likely to benefit from tariffs as customers are expected to prefer maintaining or repairing their current vehicles instead of purchasing new ones, Truist Securities said in a Monday client note.

Truist believes that auto parts are mainly "needs-based purchases" and their unit demand is expected to be fairly stable. Tariffs are anticipated to hike new vehicle prices, which could force customers to maintain or repair their existing cars rather than buying new ones, according to the brokerage.

Earlier in April, US President Donald Trump imposed 25% tariffs on imports of automobiles and certain auto parts.

The brokerage expects the aftermarket car parts retailer to take the lead in outlining the potential impact of tariffs on sales growth for the second half of 2025 and the subsequent year. Truist said it remains confident that there is a "strong upward bias" based on same stock keeping unit dynamics and consumer focus on vehicle parts spending.

"We continue to believe that O'Reilly and its auto part peers will be outright winners from tariffs," Truist wrote in the note. "We expected fundamentals to improve in 2025 as same (stock keeping unit) inflation started to increase, but now think the improvement curve will sharply steepen."

The brokerage projects O'Reilly to report first-quarter sales of about $4.08 billion, below its estimate of $4.18 billion, with revenue expected to accelerate during the year as same stock keeping unit inflation increases. Comparable store sales are expected to be in line with Truist's growth estimate of 3%. The current consensus on FactSet is for sales of $4.17 billion and same-store sales growth of 2.8% for the quarter.

O'Reilly is scheduled to report its latest quarterly results on Wednesday.

Truist is expecting the company to record "largely steady" gross margins and per-share earnings of $9.89. The Street is looking for non-GAAP EPS of $9.86. "Since O'Reilly will likely look to maintain (gross margin percentage) as they have historically done, it should result in significantly higher (gross profit) and bottom-line earnings," according to the brokerage.