JPMorgan Cuts Advance Auto Parts Price Target as Tax Stimulus Fights Energy Price Headwinds

"JPMorgan analyst Christopher Horvers trimmed his price target on Advance Auto Parts ( NYSE:AAP | AAP Price Prediction) to $59 from $64 on May 15, keeping a Neutral rating. The price target cut came as part of a broader Q1 2026 earnings preview for the retailing group, where JPMorgan flagged tax stimulus tailwinds as a partial offset to rising energy costs."

"Horvers framed the call on Advance Auto Parts around a tug-of-war in consumer wallets. Tax stimulus more than offset the headwind from energy prices in the quarter, but with WTI crude oil recently at $101.56 per barrel, gas at the pump is eating into discretionary income. JPMorgan expects very little guidance revisions from retailers because the largest seasons ( back to school and holiday) are ahead in a "high uncertainty" backdrop."

"Advance Auto Parts operates the Advance Auto Parts and Carquest banners, serving both professional installers and DIY customers. CEO Shane O'Kelly is shepherding a turnaround that produced positive comparable sales growth in FY2025 (+1%) after three straight years of declines, alongside more than 200 basis points of adjusted operating margin expansion. Advance Auto Parts' FY2026 guidance targets comparable sales growth of 1% to 2%, adjusted operating margin of 4% to 5%, and adjusted diluted EPS of $2.40 to $3.10."

A price target for Advance Auto Parts was reduced to $59 from $64 while keeping a Neutral rating. The change was tied to a Q1 2026 earnings preview that noted tax stimulus tailwinds partially offset rising energy costs. Tax stimulus supported consumer spending, but higher energy prices reduced discretionary income as WTI crude and gasoline prices increased. Guidance revisions were expected to be limited because major retail seasons are ahead in a high-uncertainty environment, leading management teams to hold conservative outlooks. Advance Auto Parts operates Advance Auto Parts and Carquest, serving professional installers and DIY customers. FY2026 targets include 1% to 2% comparable sales growth, 4% to 5% adjusted operating margin, and $2.40 to $3.10 adjusted diluted EPS, alongside a store footprint reset with 522 net closures.

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