LKQ Corporation Faces Tough Times Despite Analyst Support
Based in Chicago, Illinois, LKQ Corporation (LKQ) specializes in distributing replacement parts, components, and systems for vehicle repair and maintenance. The company has a market cap of $9.9 billion and offers a variety of products, including alternative collision replacement parts and recycled engines, used for automobiles and trucks of all sizes.
Stock Struggles Against Market Trends
Over the past year, LKQ’s stock has lagged behind the broader market significantly. The company’s shares have fallen 17.4%, while the S&P 500 Index ($SPX) has jumped nearly 31.1%. In 2024, LKQ stock is down 21.3%, compared to the S&P 500’s 24.1% gain year-to-date.
Comparison with ETFs Reveals Underperformance
When looking more closely, LKQ’s performance is also lacking when compared to the Consumer Discretionary Select Sector SPDR Fund (XLY). This ETF has seen a 29% increase over the last year, and its year-to-date rise of 20.6% stands in stark contrast to LKQ’s losses during the same period.
Quarterly Earnings Report Findings
On October 24, LKQ reported its third-quarter earnings, with adjusted earnings per share (EPS) of $0.88, which exceeded Wall Street’s forecast of $0.87. However, its revenue of $3.58 billion fell shy of analysts’ expectations of $3.63 billion. LKQ anticipates that adjusted EPS for the full year will range between $3.38 and $3.52.
Future Earnings Expectations
For its fiscal year concluding in December, analysts project that LKQ’s EPS will decline by 10.4%, landing at $3.43 on a diluted basis. Historically, the company has had mixed results regarding earnings surprises, achieving better-than-expected results in two of the last four quarters while missing estimates on two occasions.
Analysts Remain Optimistic
Among the eight analysts covering LKQ stock, the consensus rating is a “Strong Buy,” following six “Strong Buy” ratings, one “Moderate Buy,” and one “Hold.” This positive outlook has remained consistent over the past three months.
Price Targets Indicate Potential Growth
On October 30, analyst Craig Kennison from Robert W. Baird reaffirmed a “Buy” rating for LKQ, setting a price target of $48, suggesting a potential upside of 27.7% from current levels. The mean price target stands at $53.43, indicating a 42.1% premium, while the highest price target at $60 offers an ambitious upside potential of 59.6%.
On the date of publication, Neha Panjwani did not hold any positions either directly or indirectly in any of the securities mentioned in this article. All information presented here is intended for informational purposes only. For more details, please view the Barchart Disclosure Policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
