AAP Stock Forecast & Price Target

Advance Auto Parts has demonstrated significant growth over recent years through both organic means and strategic acquisitions, enhancing its market presence in North America. Strong expectations for comparable sales improvement through 2025, alongside anticipated gross margin expansion of over 100 basis points in the latter half of the year, indicate a positive trajectory for the company. The retailer's focus on optimizing inventory and supply chain efficiencies is expected to further enhance operating performance, positioning Advance Auto Parts favorably to meet its long-term financial targets.

The outlook for Advance Auto Parts is negative due to weak quarterly comparable store sales (comps) guidance, with expectations for Q1 comp declines of approximately -2%, following a previous decline of -1.0% in Q4. Furthermore, management has acknowledged that year-to-date trends have been volatile and below internal expectations, compounded by anticipated store and distribution center closure costs that could total around $200 million. Consensus estimates now reflect a lowered forecast for 2025 comps and operating margins, indicating challenges in meeting financial projections amid an increasingly competitive retail environment.