Peet Serfontein & Zimele Mbanjwa
We enter a long position with a target price of $109 and a stop-loss of $89.
O'Reilly Automotive, Inc. is a leading United States (US)-based retailer and distributor of automotive aftermarket parts, tools, equipment and accessories. The company serves both professional service providers and do-it-yourself customers through an extensive national store network, supported by a highly efficient distribution infrastructure. Its business model is anchored in consistent same-store sales growth, disciplined cost control and high levels of customer service, underpinned by a dual-market strategy targeting commercial workshops and retail consumers.
The firm benefits from strong scale advantages, favourable supplier relationships and a resilient demand profile driven by the ongoing maintenance and repair needs of an ageing vehicle fleet. O'Reilly operates across the US (>98% of revenue), Canada, and Mexico.
Technically, the price action within a developing falling wedge pattern presents an attractive buying opportunity (see the converging black trendlines on the main chart). This structure reflects volatility compression and progressively weaker downside momentum, signalling signs of seller exhaustion. A decisive break above the upper boundary of the wedge would mark a shift in market structure and could act as a catalyst for renewed upside, supported by the unwinding of short positions and fresh momentum-driven inflows.
In addition, the stock is trading near the lower boundary of an upward-sloping linear regression channel, a zone that has repeatedly acted as reliable demand support.
| Share Information | |
|---|---|
| Share Code | ORLY |
| Industry | Consumer Discretionary Distribution |
| Market Capital (USD) | 78.58 billion |
| One Year Total Return | 2.05% |
| Return Year-to-Date | 2.97% |
| Current Price (USD) | 93.92 |
| 52 Week High (USD) | 108.72 |
| 52 Week Low (USD) | 86.77 |
| Financial Year End | December |
| Although the price remains below the 200-day simple moving average (SMA), it is steadily approaching this key resistance level, signalling improving momentum, stronger accumulation and potential trend-reversal dynamics. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY25 | FY26E | FY27E | FY28E | |
| Headline Earnings per Share (USD) | 2.97 | 3.22 | 3.57 | 3.92 |
| Growth (%) | 8.32 | 10.88 | 10.01 | |
| Dividend Per Share (USD) | - | - | - | - |
| Growth (%) | - | - | - | |
| Forward PE (times) | 29.19 | 26.33 | 23.93 | |
| Forward Dividend Yield (%) | - | - | - | |
| The company is set to deliver positive earnings growth over the medium term. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view:
| Share Name and Position | AXP - Buy (Continue to hold) |
VST - Buy (Continue to hold) |
MMM - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 307.03 | 152.72 | 152.55 |
| Current Price | 332.20 | 152.72 | 145.78 |
| Movement | +8.4% | +2.0% | -4.4% |
| Comment |
The price testing the lower range of an upsloping inclining channel pattern remains of interest. Remains below its 200-day SMA but approaching it. Fading downside momentum is supportive. Our profit target is $352.00 with a trailing stop-loss at $316.00. |
The price in a developing rising wedge pattern remains of interest. Remains below its 200-day SMA and the trade is regarded as a counter-trend strategy. Fading downside momentum is supportive. Our profit target is $193.00 with a trailing stop-loss at $155.00. |
The price testing the lower range of an upsloping broadening top pattern remains of interest. Remains below its 200-day SMA and the trade is regarded as a counter-trend strategy. Fading downside momentum is supportive. Our profit target is $177.00 with a trailing stop-loss at $142.00. |
| Time to exit | 8 July 2026 | 1 July 2026 | 8 July 2026 |
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