Truist Securities reiterated a Hold rating and a $48.00 price target on Advance Auto Parts (AAP) as the auto parts retailer approaches its quarterly earnings report. The share price is trading at $54.68, above Truist’s stated target, after registering a 13.53% increase over the past week and a 41.55% gain year-to-date based on recent market data.
In its note, Truist projects comparable sales growth of roughly 2.5% for the fourth quarter, attributing that gain in part to same-SKU inflation measurements that are consistent with the firm’s card-spend readings. That top-line trajectory is one input to the firm’s broader outlook on profitability as the company attempts to stabilize results following prior margin compression.
Investor attention, Truist says, is likely to concentrate on Advance Auto Parts’ operating income margin targets for 2026. The firm models a 3.5% operating income margin for that year but explicitly states it holds "low confidence levels" in achieving that figure. The company’s upcoming earnings release, scheduled for February 13 (noted as just 4 days away in the analyst commentary), will be watched closely for signs the business can sustain recent momentum.
Analysts’ consensus estimates included in market data suggest an EPS of $1.83 for the year, signalling a return to profitability for the company in the current fiscal period if projections hold. Longer-term profitability goals remain more ambitious: the firm has set a target of reaching 7% operating income margins by 2027, up from an estimated 2.5% in 2025.
Advance Auto Parts’ current margin and liquidity metrics provide part of the backdrop for these expectations. The company reports a gross profit margin of 42.35% and a current ratio of 1.73, indicating that its liquid assets exceed short-term liabilities.
Despite the potential upside if management can execute on its plans, Truist maintains a cautious stance. The research note states the stock "could be a big stock from current levels IF they can hit these targets," but retains the Hold rating because the firm remains skeptical that Advance Auto Parts can more than double its operating income margins within the proposed timeline. This cautious posture aligns with the wider analyst consensus, which registers a Hold rating overall, although individual price targets among analysts vary widely from $20 to $65 per share.
Advance Auto Parts has continued to pay a dividend, maintaining dividend payments for 21 consecutive years, a note that factors into assessments of its shareholder return profile despite recent profitability challenges.
Other recent analyst moves and company developments add nuance to the outlook. RBC Capital trimmed its price target to $57 from $60 while keeping a Sector Perform rating; RBC’s note includes a revised fourth-quarter comparable sales estimate of +2.5%, slightly above the consensus figure of +2.2%. DA Davidson lowered its target to $47 from $55, citing concerns that margin improvements may fall short of the company’s objectives; that firm projects margins rising from 2.3% in 2025 to just over 6% by 2030.
Advance Auto Parts is also pursuing product and private-label initiatives. The company announced ARGOS, a new private-label oil and fluids brand, which is slated to begin rolling out in February and to be fully available by May, according to the company’s communications.
More skeptical voices remain in the analyst community. BofA Securities reiterated an Underperform rating with a $40 price target, pointing to a 9.1% year-over-year decline in sales for early December 2025 as a signal of lingering demand challenges. Research from J Capital highlights ongoing operational and strategic difficulties, while noting that the company has addressed near-term liquidity concerns by raising cash and extending debt maturities.
Taken together, the analyst notes and company initiatives illustrate a complex environment for Advance Auto Parts as it seeks to translate sales stability and product initiatives into sustainable margin expansion. With the quarterly report due imminently, investors and analysts will parse results closely for confirmation that revenue trends and margin levers are moving in tandem with management’s stated targets.