Monday, FBR Capital Markets upgraded O'Reilly Automotive Inc. (ORLY) shares to Outperform from Underperform. The brokerage raised its 2009 fourth quarter EPS estimate to $0.52 from $0.48, and its 2010 estimate to $2.48 from $2.27.
The brokerage downgraded Genuine Parts Co. (GPC) shares to Underperform from Market Perform. The brokerage raised its 2009 fourth quarter EPS estimate to $0.53 from $0.51, while maintaining its 2010 estimate of $2.45.
The brokerage maintained AutoZone Inc. (AZO) stock with a Market Perform rating. The brokerage raised its 2010 EPS estimate to $13.55 from $13.27.
The brokerage maintained Advance Auto Parts Inc. (AAP) stock with an Underperform rating. The brokerage maintained its 2010 EPS estimate of $2.97.
Analyst Stephen Chick thinks that the sales contribution of acquired and converted former CSK banner stores for ORLY will enable that chain to sustain positive same-store sales in 2010, likely accelerating as the year progresses, low first half of 2010, higher second half of 2010, as comparisons begin to ease again for the core business. The analyst expects that the equity market will be inclined to pay for this with a premium valuation to the group and the S&P 500 for ORLY, for the time being.
The analyst expects that converted stores to date for it are on track and in line with management's plan. While early for GPC, as the upcoming fourth quarter of 2009 EPS for that company ought to be ahead of consensus estimates, the analyst is becoming more apprehensive regarding GPC, as well as regards Auto Zone, as these chains face geographic and strategic sales overlap with ORLY, who vows to grow the fastest in the after-market auto parts retail sector.
The analyst's earnings estimates for 2010 for GPC are below consensus, and he does not think that this is reflected appropriately within the current share price for it. The analyst rated ORLY shares Outperform and GPC shares Underperform. The analyst maintained his ratings on the other two stocks in the subsector: AZO and AAP.
Finally, as it pertains to the sector, the analyst believes that the notion of tougher sales comparisons in first half of 2010, higher year-over-year gas prices, more modest miles-driven trends, and, finally, accelerating SAAR (new car) sales are becoming better advertised within the equity market than these headwinds have been previously.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.