Advance Auto Parts, Inc. (AAP) is rallying on strong demand as cash-strapped consumers choose to upgrade and maintain existing cars instead of buying new.

Company Description

Advance Auto Parts, Inc. through its subsidiaries, operates as a retailer of automotive parts, accessories and maintenance items to “do-it-yourself” in the automotive aftermarket industry. The company was founded in 1929 and has a market cap $4.18 billion.

Fourth-Quarter Results

Advance Auto made its shareholders happy on Feb 18 when the company reported solid fourth-quarter results that were ahead of expectations. Sales were up 14% from last year to $1.19 billion. When excluding one-time items, earnings came in at 51 cents per share, 14 cents ahead of the consensus.

Consistent Results

This was the fourth time in the last four quarters that the Advanced Auto has surprised and beat estimates, having done so by an average of 8 cents, or 17%.

Estimates

After the solid quarterly results, analysts upgraded their earnings estimates. The current-year is up 11 cents to $2.80 per share, while the next-year estimate is 14 cents to $3.08, a 10% earnings growth projection.

Industry Rank

Advance Auto operates in the Zacks #2 rank industry out of 217.

Valuations

Based upon the current-year estimate, this stock has a P/E multiple of 15.7X, a slight premium to the overall market.

The Chart

Shares of AAP have been on a big rally for most of the last 6 months after bottoming out above $24 in November. Since then, this stock has advanced as high as $44, within striking distance of the 52-week high above $45. Take a look at the nice up trend in the chart below.

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