Advance Auto Parts (NYSE: AAP) Q1 Earnings and Analyst Outlook

• UBS maintained a Neutral rating for Advance Auto Parts but increased its price target to $65.00.
• Advance Auto Parts reported strong Q1 earnings, with adjusted EPS of $0.77, significantly beating estimates.
• Profitability improved, with gross margin reaching 45.10% and operating margin expanding to 3.80%.

Advance Auto Parts (NYSE: AAP) is a leading retailer of automotive aftermarket parts in North America. The company serves both professional installers and do-it-yourself customers with a wide range of products. It operates in a highly competitive industry, facing rivals such as AutoZone and O'Reilly Automotive.

On May 22, 2026, analyst firm UBS reiterated its Neutral rating for Advance Auto Parts, which corresponds to a Hold action on the stock. When the rating was published, the stock price was $58.62. In its report, UBS also raised its price target on the company to $65.00 from $60.00, indicating a slightly more positive outlook.

This analyst action followed a strong first-quarter earnings report that caused the stock to climb 14.50% in a single day, as highlighted by The Motley Fool. The company announced adjusted earnings per share of $0.77. This figure significantly beat the Zacks Consensus Estimate of $0.39 per share and showed a major improvement from a loss of $0.22 per share a year ago.

While revenue grew modestly to $2.61 billion, the company's profitability improved significantly. As noted by Seeking Alpha, the gross margin, which is the profit made on sales before other expenses, improved to 45.10%. The operating margin also expanded to 3.80%, reflecting successful cost control measures and showing the company is becoming more efficient.

Despite the strong quarterly performance, Advance Auto Parts maintained its conservative guidance for the full year. The company still expects same-store sales growth of 1% to 2%. This cautious forecast may help explain why UBS chose to maintain a Neutral rating rather than upgrading its recommendation.