Advance Auto Parts downgraded to Underweight from Neutral at Atlantic Equities

Atlantic Equities analyst Sam Hudson downgraded Advance Auto Parts to Underweight from Neutral with a price target of $50, down from $130. The firm views the company’s ongoing weak performance as “indicative of structural challenges and significant share losses” and expects a new CEO to announce fundamental changes to the company’s infrastructure, further weighing on earnings. The firm also believes a revised strategy will be insufficient to drive the necessary second half acceleration required to meet Street expectations and views activist or private equity involvement as unlikely, given what it calls “the lack of an obvious acquirer and an inability to increase debt or extract value from the store network.”