Advance Auto Pieces Inc (NYSE:AAP),, Inc. (NASDAQ:AMZN) – BofA: Auto Components Shops Have Powerful Margins In $300B Market place

Lender of America is out with thoughts on the $300 billion aftermarket automobile elements and repair service market place primarily based on study final results.

The Takeaways: Suzuki highlights four big organizations in the automobile components sector in AutoZone (NYSE: AZO), O’Reilly Automotive (NASDAQ: ORLY), Progress Car Components (NYSE: AAP) and Authentic Elements Business (NYSE: GPC).

“The US automotive sections and repair service current market is big, stable, really lucrative (versus other segments of the automobile price chain, and relatively fragmented,” analyst Elizabeth Suzuki wrote in a be aware.

Automobile areas shops have noticed a 13.5% common margin compared to 5.4% for new car producers, 8% for parts brands and 3% for car dealers.

In the do-it-by yourself current market, AutoZone sales opportunities the way with 14% market share. Progress Car Pieces, O’Reilly and Genuine have industry shares of 6%, 9% and 3% respectively. New automobile dealers make up 4% of the marketplace.

The do-it-for-me marketplace sees new motor vehicle sellers have a 35% market place share. The 4 automobile areas businesses mentioned each and every have 5% or fewer market share in the classification.

What’s Upcoming: Suzuki expects consolidation to proceed in the sector.

The risk of (NASDAQ: AMZN), the most significant seller of automobile sections online, is one thing to view, according to Suzuki. The survey confirmed that prospects favor merchants that offer obtain on the internet, pickup in-store as an solution, which could fend off the large on-line retailer for now.

Value Action: O’Reilly is the only gainer in 2020 with shares up 4%. AutoZone, Advance Auto Sections and Authentic Sections shares have fallen 3%, 4% and 10% respectively on the 12 months.

Photo credit history: Steve Morgan

© 2020 Benzinga does not supply investment advice. All rights reserved.

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