Solid Quarter Reflects Strong Market and Advance Auto Parts' Improving Position; Shares Trade Fairly

In light of third-quarter results, our $215 fair value estimate for narrow-moat Advance Auto Parts should rise by a mid-single-digit percentage. Advance maintained its strength as the professional segment continued its momentum, with 3% comparable growth overall leading to 13% two-year stacked expansion that was in line with the second-quarter mark. This near-term performance suggests the firm is slightly ahead of our 2021 expectations, but we plan to maintain our long-term targets of mid-single-digit top-line growth against low-double-digit operating margins over the next decade.