UBS advises buying O’Reilly Automotive on weakness
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A earnings-driven dive for OâReilly Automotive (NASDAQ:ORLY
-10.6%) is a major opportunity for investors, according to UBS.

The Springfield, Missouri-based auto parts retailer missed on both top and bottom line expectations on Wednesday evening, citing weather and macroeconomic headwinds for the disappointment. Shares fell over 10% on Thursday morning on the back of the bearish results.

However, UBS analyst Michael Lasser argued that the bull case has not been broken in a note to clients on Thursday. 

âWe believe that recovering mobility and limited new car sales will support industry trends,â Lasser wrote. âAs such, we would take advantage of a pullback.â

He noted that while macro headwinds are certainly an issue, the companyâs maintenance of 2022 guidance should sustain faith in management. Additionally, Lasser pointed to the companyâs pricing shifts as pivotal to offsetting inflationary impacts. He suggested the companyâs track record on cost controls should promote confidence on this front.

Overall, Lasser advised investors not to overrate the quarterly earnings miss, calling it a âminor speed bump.â He retained a Buy rating on shares alongside a $790 price target, more than $150 above Thursdayâs nadir.
Read more on encouraging dynamics for auto parts retailers.