LKQ Should I Buy
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LKQ Corp is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has implemented cost-cutting measures and benefits from steady aftermarket demand, the financial performance shows significant profitability pressures, and technical indicators suggest a neutral to bearish trend. The lack of strong trading signals and mixed analyst sentiment further supports a hold recommendation.
The MACD is positive and expanding, indicating slight bullish momentum, but the RSI is neutral at 54.313. Moving averages are bearish (SMA_200 > SMA_20 > SMA_5), and the stock is trading near resistance levels (R1: 29.775). Overall, the technical indicators suggest a neutral to bearish trend.
Cost-cutting measures expected to save over $50 million annually.
Strong cash flow with $1.1 billion in operating cash flow for the full year.
Steady aftermarket demand and pricing power in the automotive replacement parts market.
Significant profitability pressures with a 57.69% YoY drop in net income and a 56.67% YoY drop in EPS.
Mixed analyst sentiment with lowered EPS estimates for 2026 and
Bearish technical indicators and lack of strong trading signals.
In Q4 2025, revenue increased by 2.67% YoY to $3.31 billion, but net income dropped by 57.69% YoY to $66 million. EPS also declined by 56.67% YoY to $0.26, and gross margin fell by 4.10% YoY to 35.08%.
Mixed analyst sentiment: JPMorgan lowered the price target to $37 but maintains an Overweight rating, citing favorable risk/reward. Barrington raised the price target to $45-$50 but lowered EPS estimates for 2026 and 2027. Barclays raised the price target to $34 but maintains an Equal Weight rating.
