O'Reilly Automotive, Inc. (NASDAQ: ORLY) released its financial results for the fourth quarter on Thursday, revealing a blend of outcomes across earnings and revenue metrics. The company reported earnings per share (EPS) of $0.71, falling just short of the consensus analyst estimate of $0.72. Simultaneously, O'Reilly's quarterly revenues reached $4.414 billion, exceeding the market expectation of $4.389 billion.
Looking ahead, O'Reilly Automotive provided guidance for fiscal year 2026 that suggests cautious optimism, with GAAP EPS projected between $3.10 and $3.20. This forecast modestly undercuts the prevailing analyst consensus, which stands at $3.31. The company anticipates total sales ranging from $18.7 billion to $19.0 billion, slightly below the market's estimate of approximately $18.968 billion.
In commentary accompanying the earnings release, CEO Brad Beckham expressed appreciation for O'Reilly's workforce, noting that the efforts of more than 93,000 employees helped secure a robust conclusion to 2025. Beckham emphasized the company's strategic gains in market share on both operational fronts, attributing these advances to superior customer service and strong availability of automotive parts. According to Beckham, these factors contributed to a 5.6% increase in comparable store sales during the quarter. The combined impact of top-line growth and improved gross margins facilitated a 12% rise in operating profit dollars and a 13% increase in diluted EPS for the period.
The market’s response to O'Reilly Automotive's earnings and guidance was slightly negative; shares declined 0.8%, closing at $92.15 on Friday.
Following the earnings announcement, leading equity analysts recalibrated their price targets on O'Reilly stock. Mizuho's David Bellinger retained an Outperform rating but trimmed the price target from $110 to $105. Likewise, Truist Securities' Scot Ciccarelli upheld a Buy rating while lowering the target price from $109 to $107. RBC Capital's Steven Shemesh also maintained an Outperform designation, adjusting the price target downward from $111 to $109.
This cluster of moderate target reductions reflects a wary but constructive stance among analysts in light of the mixed financial results and conservative outlook for fiscal year 2026. Investors evaluating O'Reilly Automotive should consider these revisions in the context of ongoing company performance and broader market conditions.
Key Points
- O'Reilly Automotive reported Q4 earnings of $0.71 per share, slightly below analyst consensus of $0.72.
- The company’s Q4 revenue of $4.414 billion surpassed estimates pegged at $4.389 billion.
- Full-year 2026 guidance projects GAAP EPS of $3.10 to $3.20, under the market consensus of $3.31.
- Market response included a 0.8% decline in O'Reilly shares following the earnings report.
- Analysts from Mizuho, Truist Securities, and RBC Capital lowered price targets but maintained positive ratings.
Risks and Uncertainties
- EPS guidance for 2026 trailing analyst expectations introduces uncertainty regarding profit margins and operational efficiencies.
- Price target downgrades by multiple analysts may signal caution about near-term share price appreciation.
- Market reaction, though modest, indicates possible investor concerns about the sustainability of revenue growth.
- Dependence on continued strong customer service and parts availability is critical to maintaining growth momentum.