AAP Shakes off Earnings, Revenue Miss

AAP has almost doubled off its mid-March lows

by Jake Scott

Published on May 19, 2020 at 10:38 AM

Advanced Auto Parts, Inc. (NYSE:AAP) is soaring today, up 7.4% to trade at $140.79 at last check, despite reporting first-quarter earnings and revenue that were lower than Wall Street's estimates. What's instead powering the stock's rally today is the company's same-store sales estimates that markedly improved the first four weeks of the second quarter.

Now up 51.2% for the quarter, AAP's has almost doubled off its March 23 eight-year low of $71.32. The equity is testing its 200-day moving average today, a trendline not conquered on a closing basis since Jan.3. Longer term though, the shares are still facing a 12.6% year-to-date deficit.

Currently, analyst sentiment for AAP is mixed. Of the 17 in coverage, nine brokerages sport a "buy" or better. The other eight rate it a tepid "hold" with no "sells" in sight. Plus, the consensus 12-month price target of $131.31, is a 6.3% discount to its current levels. 

In the options pits the last 50 days, exactly 1.15 puts have been bought for every call at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 95% of all other readings from the past year, meaning options players have had a bigger-than-usual appetite for long puts of late. 


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