Stock Price & Analysis

Based on the recent Morgan Stanley upgrade and current market data, ORLY stock appears to be a buy opportunity. The company's strong market position and consistent performance in the Professional business segment support continued growth.

Key Factors Supporting Buy Recommendation:

1. Recent Analyst Upgrade: Morgan Stanley upgraded ORLY from Hold to Buy with a price target of $1,450, suggesting a 16.8% upside potential from current levels.

2. Strong Business Fundamentals:

• Consistent same-store sales growth for 31 straight years
• Operating margin averaging 20.6% over trailing five years
• Expected free cash flow of $1.8-2.1 billion in 2024

3. Industry Tailwinds:

• Growing addressable market with 13.9% increase in registered vehicles (2012-2022)
• Increasing average vehicle age, up 9.9% (2012-2022)
• Recession-resistant business model

4. Technical Indicators:

• RSI at 60.62 indicates moderate bullish momentum without being overbought
• Stock is trading above its 20-day moving average of $1,205.94
• Recent price action shows positive momentum with +2.00% gain in regular market trading

Potential Risks:

• Currently trading at a P/E ratio of 29.6x, which is 24% above its 10-year average
• Limited room for error given the premium valuation
• Any earnings miss could trigger a sharp selloff

Based on the provided data and recent market analysis, here's the price prediction for ORLY stock in 2025:

ORLY's stock price is expected to reach $1,450 by mid-2025, representing a potential upside of approximately 17% from current levels. This projection is supported by Morgan Stanley's recent upgrade to "overweight" with a $1,450 price target, citing ORLY's position as "best in-class operator" in the auto parts industry.

The bullish outlook is driven by three key factors:

1. Strong Professional Business Growth: ORLY's Professional segment saw a 15% year-over-year increase in ticket counts and mid-single-digit comparable store sales growth of 7.9%.

2. Market Leadership: The company maintains dominance in the highly fragmented U.S. automotive parts market, benefiting from competitors' focus on other segments.

3. Industry Tailwinds: The expanding addressable market with registered vehicles rising 13.9% and average vehicle age increasing 9.9% between 2012-2022 creates sustained demand for aftermarket parts.

The S1 support level for ORLY Stock is $1200.36 ,The R1 resistant level for ORLY Stock is $1252.77.

As of the end of day on 2025-01-24, the price of ORLY Stock was $1253.97.

The target price for ORLY Stock according to analyst rating is 1,308, with the highest price target at 1,400 and the lowest at 1,110. Analysts have a Strong Buy rating on ORLY Stock overall.

The market cap of ORLY is $72.4B.

Based on the provided financial data and recent analyst ratings, here's a concise analysis of ORLY's valuation:

Valuation Analysis ORLY currently trades at a PE ratio of 28.5x (Q3 2024), which is significantly above its historical average, indicating the stock is relatively expensive. The EV/EBITDA of 19.5x and PS ratio of 4.1x further support this view.

Financial Performance The company shows strong financial health with:

• Consistent revenue growth across quarters ($3.98B → $4.36B)
• Improving net margins (13.8% → 15.3%)
• Solid gross margins maintaining above 50%

Recent Analyst Actions Morgan Stanley just upgraded ORLY to Buy (Jan 21, 2025) with a price target of $1,450, representing a 16.8% upside. This follows multiple other positive ratings, though some analysts maintain more cautious stances, like Barclays' Hold rating with a $1,110 target.

Growth & Market Position The company maintains strong market position in the U.S. automotive parts industry. Its addressable market continues expanding with:

• 13.9% increase in registered vehicles (2012-2022)
• 9.9% rise in average vehicle age, benefiting aftermarket parts demand
• Consistent same-store sales growth for over 31 years

Conclusion ORLY appears overvalued at current levels based on traditional metrics. While the company's business fundamentals remain strong, the premium valuation leaves little room for error and makes the stock vulnerable to any negative surprises.

O'Reilly Automotive, Inc. is a specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States, serving both the do-it-yourself and professional service provider markets. The Company's stores carry various product line, including new and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting, oil and wiper blades, and accessories, such as floor mats, seat covers and truck accessories. Its stores offer various enhanced services and programs to its customers, such as battery diagnostic testing; battery, wiper and bulb replacement; custom hydraulic hoses, and drum and rotor resurfacing. It operates approximately 6,157 stores across 48 states in United States, Puerto Rico and Mexico.

Based on the provided data and Morgan Stanley's recent upgrade, O'Reilly Automotive (ORLY) is projected to reach $1,450 by 2030, driven by three key factors:

First, the company's strong market position and consistent growth trajectory. ORLY has demonstrated remarkable performance with 31 straight years of same-store sales growth, including a 7.9% increase in 2023. The company maintains high operating margins averaging 20.6% over the past five years.

Second, favorable industry tailwinds support long-term growth. The number of registered vehicles in the U.S. increased 13.9% between 2012-2022, while the average vehicle age rose 9.9%. This expanding pool of aging vehicles creates sustained demand for aftermarket parts.

Third, the company's recession-resistant business model and strong cash flow generation. Management expects $1.8-2.1 billion in free cash flow for 2024, which they're using for aggressive share buybacks, reducing outstanding shares by 4% in the past 12 months.

However, investors should note that ORLY currently trades at a P/E ratio of 29.6x, which is 24% above its 10-year average. While the company's fundamentals remain strong, this elevated valuation suggests limited upside potential in the near term unless earnings growth accelerates significantly.

The $1,450 price target represents approximately 19% upside from current levels by 2030, implying modest annual returns. This projection assumes continued execution of ORLY's proven business model while accounting for the current premium valuation.

ORLY has a total of 75614 employees.