O'Reilly Automotive Inc

ORLY: XNAS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$857.00	Ghn	Tdpzqjfcq

Dual-Market Strength Drives Strong Third Quarter for O’Reilly, but Shares Seem Expensive

Zain Akbari

Oct 28, 2022

We plan to lift our $600 per share valuation of narrow-moat O'Reilly by a mid-single-digit percentage after it posted strong third-quarter earnings (including 7.6% comparable growth) that leave it tracking above our full-year expectations. Our long-term forecast still assumes mid-single-digit percentage annual sales growth and low-20s adjusted operating margins. With the shares trading higher by a similar percentage after the news as our planned increase, we suggest investors await a more attractive entry point.

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