State Farm ending non-OEM parts policy ‘important catalyst’ for LKQ, says Baird

Baird analyst Craig Kennison notes that Repairer Driven News reported that State Farm will end its policy discouraging the use of non-OEM parts and calls the news “an important catalyst” for LKQ Corp. as the leading provider of alternative parts. State Farm recently had signaled a willingness to use more non-OEM parts through various pilot programs, but a policy transition from pilot programs to widespread use of alternative parts can boost organic growth in the North American collision business for LKQ, says the analyst, who has an Outperform rating on the shares.