Auto Stock Hits 1-Year Low After Dismal Earnings

Wedbush slashed its price target in response

Deputy Editor
May 24, 2022 at 10:41 AM
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Advance Auto Parts Inc (NYSE:AAP) stock is down 5.2% to trade at $173.68 at last glance -- earlier hitting $172.86, its lowest level in over a year. The auto retailer's first-quarter results just barely missed estimates, while its full-year sales forecast was projected to be below expectations. In response, Wedbush slashed its price target to $215 from $270. 

AAP is down 25.9% year-to-date and 27.5% off its Jan. 5 all-time high of $244.55. Shorter term, the shares are fresh off their worst week since March 2020. Don't be surprised if more analysts adjust their stance going forward. Seven of the 13 brokerages rate the equity a "strong buy," with zero "sells" on the books. Plus, the consensus 12-month price target of $247.31 sits above the aforementioned record high, and a 39.6% premium from its current perch.

Puts have been much more popular in the options pits. Advance Auto Parts stock's 10-day put/call volume ratio of 6.17 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 95% of readings from the past year. 

So far today, the options pits appear to be keeping this bearish sentiment, with 3,467 puts exchanged -- 12 times the intraday average and six times the amount of calls. The June 150 and 100 puts are the most popular contracts, with new positions being bought to open at the 165 put in the same monthly series. 


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