RBC Capital raised its price target on Advance Auto Parts (NYSE:AAP) to $65 from $62, maintaining a Sector Perform rating.
The firm highlighted strong Q1 results with comparable sales up 3.5%, beating the consensus of 2.2%. Adjusted EPS exceeded expectations by 66% at $0.77.
Traffic was positive in both professional and DIY segments, indicating operational improvements resonating with consumers. The stock trades at $58.62, with a 50.7% year-to-date return.
RBC Capital kept its Q2 comparable sales estimate at 2% but lowered adjusted EPS to $0.75 from $0.85. Management remains confident in guidance despite a challenging macroeconomic environment.
For 2026 and 2027, RBC now models 1.5% comparable sales growth for each year. Adjusted EPS estimates are $2.97 for 2026 and $4.47 for 2027. The new price target of $65 is based on approximately 22x the revised 2026 EPS.
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