Dorman Products price target lowered to $127 from $130 at Barrington

Barrington analyst Gary Prestopino lowered the firm’s price target on Dorman Products to $127 from $130 and keeps an Outperform rating on the shares following quarterly results. The firm notes net sales were in line with expectations as net sales growth progressed on a monthly basis throughout Q1/2023, while EPS were in line with management’s expectations excluding the impact of approximately $4M of charges booked into SG&A expense. As expected, inflated cost inventory depressed gross margin, with management saying it believes the "high-water mark" in terms of inflated cost inventory is behind the company as inventory balances dropped to $687M at the end of Q1/2023 from $756M at the end of Q4/2022. Starting in Q2/2023, Dorman expects to see lower cost inventory selling through, driving sequential margin expansion, the firm adds.