Advance Auto Parts (AAP) Restructuring Shows Early Signs of Success with 1.12% Stock Increase
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 19 2026
0mins
Source: Fool
- Restructuring Implementation: Under CEO Shane O'Kelly, Advance Auto Parts has closed over 700 locations to focus operations in areas where it ranks No. 1 or No. 2 based on store density, optimizing resource allocation and enhancing market competitiveness.
- New Store Opening Plan: The company plans to open 100 new stores by 2027, in addition to the 30 already opened in 2025, aiming to enhance customer service capabilities by increasing stock-keeping units in market hub stores and improving same-day delivery services.
- Profitability Improvement: Although past restructuring efforts have not yielded lasting results, there has been a slight uptick in profit margins recently, indicating that this restructuring may bring positive changes, attracting deep-value investors willing to take on some risk.
- Market Position Advantage: Advance Auto Parts is exceptionally cheap on a price-to-sales basis, and while its EBITDA margins lag behind competitors, the implementation of the new strategy holds promise for improving profitability and achieving significant stock price appreciation.
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Analyst Views on AAP
Wall Street analysts forecast AAP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AAP is 55.23 USD with a low forecast of 40.00 USD and a high forecast of 65.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
17 Analyst Rating
1 Buy
14 Hold
2 Sell
Hold
Current: 49.590
Low
40.00
Averages
55.23
High
65.00
Current: 49.590
Low
40.00
Averages
55.23
High
65.00
About AAP
Advance Auto Parts, Inc. is an automotive aftermarket parts provider in North America, serving both professional installers (professional) and do-it-yourself (DIY) customers, as well as independently owned operators. The Company's stores and branches offer a range selection of brand names, original equipment manufacturer (OEM) and owned brand automotive replacement parts, accessories, batteries and maintenance items for domestic and imported cars, vans, sport utility vehicles and light and heavy-duty trucks. The Company operates approximately 4,788 stores primarily within the United States (U.S.), with additional locations in Canada, Puerto Rico and the U.S. Virgin Islands. The Company also serves approximately 934 independently owned Carquest branded stores across these locations in addition to Mexico and various Caribbean islands. Its stores operate primarily under the Advance Auto Parts and Carquest trade names.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Pursue Wealth Partners Fully Exits Advance Auto Parts Stake
- Stake Change: Pursue Wealth Partners LLC reported on January 26 that it fully sold its 65,664 shares of Advance Auto Parts, valued at approximately $4 million, indicating a pessimistic outlook on the company's future performance.
- Asset Management Impact: This position accounted for 2.2% of the fund's $182 million in assets under management at the end of Q3, and the complete exit may affect the diversification of its investment portfolio.
- Performance Comparison: While Advance Auto Parts achieved a 3% increase in same-store sales in the latest quarter, its stock price has declined by 1.8% over the past year, contrasting sharply with the S&P 500's total return of 15.4%, reflecting market concerns about its prospects.
- Competitive Pressure: The company is executing a turnaround plan by closing underperforming stores and opening new ones, but in a highly competitive market, investors should monitor sustained same-store sales growth before deciding to invest further in the company.
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