Why Shares in Advanced Auto Parts Crashed Today
Shares in auto parts retailer Advance Auto Parts (NYSE: AAP) were lower by more than 8% as of 11 a.m. today. The move came after Goldman Sachs downgraded the stock from neutral to a sell, amid concerns that it was losing market share to competitors. In addition, the Goldman Sachs analyst believes the current valuation relies on a margin recovery, which might not occur in the current environment.It's hard enough for a Wall Street analyst to refrain from issuing a buy recommendation, so when a heavyweight like Goldman Sachs issues a sell rating, it has a significant impact.The analyst's channel checks suggest that Advance Auto may be losing market share and experiencing margin pressure, a more significant concern than the company's current valuation. After all, if management can turn around the company's lackluster performance, then the earnings recovery can be dramatic.Continue reading
Shares in auto parts retailer Advance Auto Parts (NYSE: AAP) were lower by more than 8% as of 11 a.m. today. The move came after Goldman Sachs downgraded the stock from neutral to a sell, amid concerns that it was losing market share to competitors. In addition, the Goldman Sachs analyst believes the current valuation relies on a margin recovery, which might not occur in the current environment.
It's hard enough for a Wall Street analyst to refrain from issuing a buy recommendation, so when a heavyweight like Goldman Sachs issues a sell rating, it has a significant impact.
The analyst's channel checks suggest that Advance Auto may be losing market share and experiencing margin pressure, a more significant concern than the company's current valuation. After all, if management can turn around the company's lackluster performance, then the earnings recovery can be dramatic.
