LKQ Corp
LKQ: XNAS (USA)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$18.00 | Thnmmgr | Sgxhlzqbl |
LKQ: Impressive Distribution Scale Should Prompt a Favorable Organic Growth Trajectory
We raised our fair value estimate on narrow-moat LKQ by 3% to $53 due to a slight uptick in our midcycle operating margin forecast to 10.4% (versus 10% previously). We currently view shares as undervalued as near-term demand pressures have weighed on the firm’s results in recent quarters. Still, we think LKQ enjoys a strong position in the highly fragmented auto parts distribution industry, buoying its long-term prospects.