William Blair analyst Ryan Merkel downgraded LKQ Corp. to Market Perform from Outperform saying he sees too many risks entering 2019 that could limit share appreciation. The company's organic growth and margins could disappoint in 2019 as the Street's 2019 adjusted earnings per share estimate of $2.50 looks optimistic, Merkel tells investors in a research note. . In North America, the analyst believes "tough" organic sales comparisons and slower specialty sales could limit organic growth to 3%-4%. On slower sales growth, rising product costs, and increasing wages, LKQ's adjusted EBITDA margin expansion will be challenged, says Merkel.
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