Among the multiple major players in theÂ auto partsÂ sector,Â O’Reilly Automotive IncÂ O'Reilly Automotive, Inc. (ORLY - Get Rating) 2.55%Â stands out to benefit the most from a “weather deep dive” analysis, according to JPMorgan.
JPMorgan’s Christopher Horvers maintains an Overweight rating on O’Reilly Automotive with a $398 price target and is now included in the firm’s “Analyst Focus List.”
Weather is a key factor in determining auto parts demand in terms of both “in the moment” (i.e., freezing weather prompts battery failure) and a lagged impact (repairs from salt on roads or corrosion), Horvers said in a research report. The research firm’s analysis of weather trends found the following:
- 2019 snowfall was down year-over-year in the northeast and up in north central. Based on a geographical exposure, O’Reilly Automotive is best positioned to take advantage of the 2019 “solid but not as good as 2018” snow trends.
- 2018 summer was “good overall,” but current forecasts call for a “relatively cooler”Â summer, especially in the west where O’Reilly has strong exposure.
- O’Reilly’s favorable geographic exposure should help the company regain the “best comp crown” in the group.
Shares of O’Reilly Automotive tradedÂ higher by 2.5 percent to $385.89 Monday.
O’Reilly Automotive Inc. shares were unchanged in after-hours trading Monday. Year-to-date, O'Reilly Automotive, Inc. (ORLY - Get Rating) has gained 12.07%, versus a 12.14% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Benzinga.