LKQ Corp Received its Third Buy in a Row

By Austin Angelo

After Susquehanna and Jefferies assigned a Buy rating to LKQ Corp in the last month, the company received another Buy, this time from FBR Capital. Analyst Christopher Van Horn reiterated a Buy rating on LKQ Corp (NASDAQ: LKQ) today and set a price target of $40. The company’s shares opened today at $32.12.

Van Horn said:

“We remain positive on LKQ shares after they closed down 4% following a solid 3Q16 report on October 27. Lower FY16 guidance as well as slightly challenged domestic North America growth cast a bit of a shadow over the quarter’s solid performance from the company’s recent acquisitions: Management noted on the conference call that Rhiag is on track to realize significant savings from pan-European procurement initiatives, and Pittsburgh Glass Works (PGW) won a manufacturing renewal agreement for an existing OE platform with a new model launch. Glass revenue was well above our expectations as well as the Street’s, so that business in particular looks to be playing out well. We believe that the Andrew Page acquisition (which we touch on in more detail below) could help further develop LKQ’s European strategy by complementing ECP’s solid growth trajectory. We think that these factors illustrate the long-term upside case for LKQ’s stock and should more than offset nearer-term concerns about incrementally lower guidance and temporarily slower domestic organic revenues.”

According to TipRanks.com, Horn is a 3-star analyst with an average return of 1.8% and a 40.0% success rate. Horn covers the Consumer Goods sector, focusing on stocks such as Standard Motor Products, Federal-Mogul Corp., and Tower International.

Currently, the analyst consensus on LKQ Corp is Strong Buy and the average price target is $40, representing a 24.5% upside.

In a report issued on October 18, Jefferies also maintained a Buy rating on the stock with a $40 price target.

LKQ Corp’s market cap is currently $9.76B and has a P/E ratio of 21.94. The company has a book value ratio of 2.9513.

Based on the recent corporate insider activity of 71 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of LKQ in relation to earlier this year. Last month, Paul Meister, a a Director at LKQ bought 80,000 shares for a total of $429,600.

LKQ Corp. engages in the provision of replacement parts, components, and systems needed to repair cars and trucks. It operates through the following segments: Wholesale-North America; Europe; Specialty; and Self Service. The company was founded in February 1998 by Donald F. Flynn and is headquartered in Chicago, IL.