UBS maintained its Neutral rating on Advance Auto Parts (NYSE:AAP) and left its price target unchanged at $65.00, reiterating a cautious stance while the auto parts retailer continues to execute a multi-quarter turnaround plan. The stock was trading at $54.49 at the time of the note, and InvestingPro data shows the firm's Fair Value assessment sits close to that market level.
In its note, UBS reminded investors that Advance Auto Parts has previously warned the recovery is unlikely to be "linear," and that performance could fluctuate as the company works through operational and market pressures. That caveat follows a period of strong recent returns for the shares - a 13.53% increase over the past week and a 41.55% gain year-to-date - gains UBS views as not yet conclusive evidence of a durable turnaround.
The bank said the company may need additional time to meet its longer-term objectives, pointing to a complex macroeconomic environment and tariff impacts as potential constraints on the pace of progress. UBS described the stock's potential upside and downside as roughly balanced, indicating it expects the shares to trade in a range until Advance Auto Parts can provide more consistent proof of sustainable business improvements.
Valuation also factors into UBS's Neutral stance. The firm highlighted that the shares trade at about 19.5x next-twelve-months price-to-earnings, a multiple it views as reflective of the market's current assessment of risk and recovery prospects.
Several other analysts have issued recent updates ahead of the company's quarterly report. Truist Securities projects comparable sales growth of roughly 2.5% for the fourth quarter. RBC Capital also adjusted its fourth-quarter sales estimate to 2.5%—slightly above the consensus of 2.2%—but trimmed its price target to $57.00. DA Davidson lowered its price target to $47.00 and flagged concerns that margin improvements could fall short of company targets. Bank of America Securities reiterated an Underperform rating, citing a 9.1% year-over-year sales decline based on recent card data.
On the product front, Advance Auto Parts announced plans to launch ARGOS, a private-label oil and fluids brand that will be sold exclusively at Advance and Carquest stores in the U.S. by early 2026. Initial ARGOS products will roll out in February, with the full portfolio, including a variety of motor oils and performance chemicals, expected to be available by May. The rollout is part of the company's broader effort to expand product offerings while navigating mixed sales signals and shifting analyst sentiment.
With quarterly results approaching and analysts divided on near-term sales and margin trajectories, UBS's Neutral rating underscores the bank's view that clearer, sustained operational improvements will be necessary before upside becomes more compelling than downside.