ORLY, AAP, AZO Stocks Slide In Auto-Parts Industry Crash

The auto-parts sector is tumbling to new lows, after O'Reilly Automotive reported weak same-store sales

Managing Editor
Jul 5, 2017 at 12:56 PM
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U.S. stocks are sluggish today, with the Dow slightly lower as markets await the Fed minutes and watch oil prices fall. The car-parts retailer sector is taking a serious tumble, as O'Reilly Automotive Inc (NASDAQ:ORLY)Advance Auto Parts, Inc. (NYSE:AAP), and AutoZone, Inc. (NYSE: AZO) are all among the worst of the S&P 500 Index (SPX) so far. All three stocks are currently short-sale restricted. Here's a quick look at what's moving shares of ORLY, AAP, and AZO.

Poor Same-Store Sales Sideline O'Reilly Stock

O'Reilly Automotive stock is reeling, down 20% to trade at $176.44, a just off a new two-year low of $173.89, after the company's second-quarter same-store sales missed expectations. Comparable-store sales rose 1.7%, as opposed to the 3%-5% range expected. CEO Greg Henslee cited "continued headwinds from a second consecutive mild winter and overall weak consumer demand" for the downbeat numbers, which he said will "have a consequent impact on our operating profitability." O'Reilly will report second-quarter earnings on July 26.

It's been a rough year for ORLY stock, which has now shed 37% year-to-date, and is trading below the formerly supportive $225-$230 region. Options traders are jumping all over ORLY puts today, which are trading at 13 times the average intraday volume. In fact, both ORLY stock volume and options volume is pacing for an annual high. Prior to today, ORLY's near-term calls were the options of choice. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.62 sits in the 1st percentile of its annual range, meaning short-term options players have rarely been more call-heavy in the past year. 

ORLY Drop Veers Into Advance Auto Parts Stock's Lane

Advance Auto Parts stock is down 14% to trade at $102.01, suffering in sympathy with ORLY. Earlier, AAP shares fell as low as $99.13, marking their first foray below the century mark since late 2013. AAP stock has dropped 40% year-to-date, and Wedbush today lowered its price target to $150 from $160, and trimmed its second-quarter earnings and comps estimates. More bearish notes could be on the way for Advance Auto Parts, too. Among the 18 brokerages covering AAP stock, nine rate it a "strong buy."  

AutoZone Stock Cannot Avoid The Car-Part Pain

AutoZone stock is down 10% to trade at $515.09, as it gets pinched by the poor same-store sales numbers from competitor O'Reilly Automotive. Similar to ORLY and AAP stock, AZO shares touched a new low of $514.47 in intraday trading -- their lowest point since October 2014. The stock has now shed 34% year-to-date. 

Several AutoZone options buyers are likely cheering today, though. AZO stock boasts a 50-day put/call volume ratio of 2.19 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 92nd percentile of is annual range. In other words, speculators were buying to open AZO puts over calls at a faster-than-usual clip during the past two weeks.

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