The shares of this auto parts supplier were recently upgraded at Guggenheim to ‘Buy’.
LKQ Corporation (LKQ)
From SmallCap Informer, Investor Advisory Service
LKQ Corporation (LKQ) closed out a challenging 2018 with solid Q4 results. Total sales grew 22%, which was generally in line with expectations. On an organic basis, sales grew 3% with acquisitions adding 20% and foreign exchange serving as a modest headwind.
Organic growth in Europe continued to lag North American growth. The quarter included impairment charges resulting in a $0.23 hit to EPS. Adjusted EPS grew 17% to $0.48. During the quarter the company repurchased $60 million in stock, a modest amount but notable given it is not a regular repurchaser of its own stock.
For 2019, LKQ has indicated it expects revenue growth will moderate as it emphasizes more profitable revenue growth and free cash flow generation. Given its recent margin challenges and expected continued headwinds from lower scrap metal prices and a stronger dollar, this emphasis is sensible. Guidance contemplates 2%-4% organic revenue growth for parts and services and adjusted EPS of $2.34-$2.46, implying an increase of 7%-12%.
It is worth highlighting that guidance is based on no anticipated disruptions from Brexit, which
could prove to be an overly optimistic assumption. LKQ is a buy up to 37.
Doug Gerlach, Smallcapinformer.com, 1-877-33-ICLUB, April 2019