Advance Auto Parts (NYSE:AAP) received several downgrades and price target cuts following the Q1 miss and guidance cut. As a result, shares closed 35% lower yesterday and were trading more than 5% intra-day today.
Goldman Sachs downgraded the company to Neutral from Buy and slashed its price target to $82.00 from $155.00 as the recent Q1 miss, reduced 2023 outlook, and share loss in the DIFM business raise concerns regarding near-term execution, while the ongoing margin erosion appears likely to weigh on profitability and cash flow.
The bank also mentioned a lack of clarity regarding the company’s pending CEO transition which could impact its ability to stem share losses and improve margins in the near term.
JPMorgan downgraded the stock to Neutral from Overweight and cut its price target to $84.00 from $165.00. Meanwhile, Raymond James downgraded to Market Perform from Strong Buy.
Barclays cut its price target on the stock to $69.00 from $129.00 while reiterating its Equalweight rating. Weak earnings, with sales within the range of expectations but margins significantly worse, lead Barclays to believe that either the issues are even deeper or that this was a very deliberate reset. “Ultimately, we struggle with the sales productivity roadmap and see risks of further reinvestment ahead,” added the firm.