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Fly News Breaks for September 15, 2017
GPC, AZO, ORLY, AAP
Sep 15, 2017 | 09:33 EDT
Wolfe Research analyst Chris Bottiglieri noted that auto part retailers have been "spookily rebounding" despite his survey pointing to negative investor sentiment, leading him to revisit his LBO model to assess take-out risk for the group. He concludes that while Advance Auto Parts (AAP) is entering a valuation range where an LBO is "in the discussion," he sees it as still "way too early" to consider the possibility of an LBO for O'Reilly Automotive (ORLY), AutoZone (AZO) or Genuine Parts (GPC). While Advance Auto shareholder Starboard may not sanction a deal that locks in losses, his estimated holding cost of $154 for the firm is a "soft floor" for a take-out price, he added.