O'Reilly Automotive is a top auto retail pick at Cowen ahead of earnings
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O'Reilly Automotive (NASDAQ:ORLY) was named a top pick at Cowen on Tuesday.
The firm noted that O'Reilly Automotive (ORLY) operates a best-in-class supply chain, which combined with an improved value proposition and great service should drive long-term market share growth across both the Do-It-For-Me and Do-It-Yourself channels. Cowen forecasts revenue will grow at a +6.8% CAGR between FY22 and FY26, and projects the auto retailer's market share to reach 9.7% by FY26. O'Reilly (ORLY) was also called a premier capital allocator by Cowen on a forecast for free cash flow to increase at a +8.9% CAGR, and buyback activity to help lift EPS. In terms of valuation, ORLY was said to deserve to trade at a premium multiple.
Seeking Alpha analyst David Trainder is also bullish on O'Reilly Automotive (ORLY). Trainer thinks growing demand for vehicles and parts, rising miles traveled, and continued expansion in the company's store network contribute to a favorable risk-reward profile on the stock.
O'Reilly Automotive (ORLY) is due to report earnings on October 25 after the closing bell. Of note, 14 out of the last 16 EPS revisions from analysts have been to the upward side. ORLY has topped revenue and EPS estimates in four straight quarters.
Shares of O'Reilly Automotive (ORLY) nudged up 0.49% in premarket action to $919.15 vs. the 52-week trading range of $714.80 to $975.72.

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