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StockNews.com Upgrades LKQ (NASDAQ:LKQ) to Buy

StockNews.com Upgrades LKQ (NASDAQ:LKQ) to Buy

  • 24.03.2025 02:07
  • etfdailynews.com
  • Keywords: High Risk

StockNews.com upgraded LKQ (NASDAQ:LKQ) to Buy, with multiple analysts raising price targets and assigning positive ratings. The company reported strong earnings and announced a quarterly dividend of $0.30 per share. insiders have sold shares recently, but institutional investors hold most of the stock.

Meta Products

Estimated market influence

Context

Analysis of LKQ Corporation (NASDAQ:LKQ)

Stock Upgrades and Price Targets

  • StockNews.com upgraded LKQ to "Buy."
  • Barrington Research reissued an "outperform" rating with a $60.00 price target.
  • JPMorgan Chase & Co. increased their price target from $48.00 to $49.00 and maintained an "overweight" rating.
  • Average analyst rating: Buy, with an average price target of $52.60.

Earnings Performance

  • Q4 earnings per share (EPS): $0.80, beating estimates by $0.04.
  • Return on equity (ROE): 14.93%.
  • Net margin: 4.81%.
  • Revenue: $3.36 billion, slightly below consensus estimate of $3.42 billion.
  • Analysts forecast EPS for the current year: 3.57.

Dividend Announcement

  • Quarterly dividend: $0.30, paid on March 27, 2024.
  • Annualized dividend: $1.20.
  • Dividend yield: 2.97%.
  • Dividend payout ratio (DPR): 45.80%.

Insider Activity

  • Director sold 5,000 shares at an average price of $36.14, totaling $180,700.
  • Insider ownership decreased by 1.34%, now holding 369,462 shares valued at $13.35 million.
  • Total insider sales in the last three months: 35,000 shares, worth $1.416 million.
  • Percentage of stock owned by insiders: 0.55%.

Hedge Fund Activity

  • Cromwell Holdings LLC: Increased holdings by 81.0% to 742 shares ($27,000).
  • Private Trust Co. NA: Increased stake by 31.2% to 1,256 shares ($50,000).
  • CENTRAL TRUST Co: Increased holdings by 618.0% to 1,673 shares ($61,000).
  • Wilmington Savings Fund Society FSB: New stake worth $81,000.
  • Allworth Financial LP: Increased stake by 107.8% to 2,099 shares ($82,000).
  • Total institutional ownership: 95.63%.

Business Overview

  • LKQ operates in the auto parts aftermarket, distributing replacement parts and components.
  • Segments: Wholesale-North America, Europe, Specialty, and Self Service.
  • Products include: bumper covers, body panels, engines, transmissions, scrap metal, and specialty vehicle accessories.
  • Distribution channels: salvage products, mechanical parts, and specialty aftermarket products.

Market Implications

  • Analyst Confidence: Multiple upgrades indicate positive sentiment and potential upside.
  • Earnings Beat: Strong EPS performance suggests operational efficiency.
  • Dividend Attraction: High yield may appeal to income-focused investors.
  • Insider Sales: Suggests cautious optimism or portfolio diversification by insiders.
  • Institutional Buying: Hedge fund activity indicates confidence in long-term growth.

Competitive Dynamics

  • Competitors include AutoZone, O'Reilly Automotive, and Carquest.
  • LKQ's focus on aftermarket parts positions it as a key player in the repair and maintenance market.

Long-Term Considerations

  • Industry Growth: Steady demand for auto parts aftermarket driven by aging vehicles and DIY repairs.
  • Regulatory Impact: Potential changes in recycling or automotive regulations could affect operations.
  • Strategic Expansion: LKQ's geographic reach (North America, Europe) provides a strong market presence.

Conclusion

LKQ's recent upgrades, earnings performance, and dividend announcement suggest positive momentum. However, insider sales and competitive pressures require monitoring. The company's position in the aftermarket sector offers long-term growth opportunities, supported by institutional confidence.