Advance Auto Parts Inc

AAP: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$75.00	Dtnn	Lvcld

Advance Ends 2021 Strong as Its Ongoing Initiatives Bear Fruit; Shares Trade Fairly

Zain Akbari

Feb 15, 2022

Our $220 per share valuation of narrow-moat Advance should rise by a mid-single-digit percentage after it posted fourth-quarter earnings, although the increase is mostly on account of the rescission of our past expectations of a 2022 U.S. corporate tax rate hike. We believe the firm is on track to reach our long-term targets (mid-single-digit percentage top-line growth against low-double-digit operating margins over the next decade), although we suggest prospective investors await a more attractive entry point.

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