Overview
DA Davidson has reaffirmed a Buy recommendation on O’Reilly Automotive (NASDAQ:ORLY) and maintained a $110.00 price target as the auto parts retailer prepares to report fourth-quarter 2025 results. The firm’s target sits near the median of the analyst community and mirrors an environment in which the consensus remains generally bullish, with a 1.61 recommendation score (where 1 equates to Strong Buy) and individual analyst targets that span from $64 to $125.
Earnings expectation and topline context
O’Reilly is scheduled to announce its quarter on Wednesday after market close. Street estimates point to comparable-store sales growth of about 5% for the quarter. DA Davidson notes that this pace would be roughly consistent with the 5.6% comparable sales increase reported in the prior quarter, although the firm also highlights that O’Reilly faces a tougher year-over-year comparison this reporting period.
Data referenced in the research commentary shows ORLY has produced 6.19% revenue growth over the past twelve months and retained a 51.47% gross profit margin. DA Davidson projects that margins should tick higher in the upcoming quarter.
Stock performance and valuation
O’Reilly shares have risen 8% year-to-date following a 15% gain last year, a performance DA Davidson describes as evidence of the retailer’s consistency within the retail sector. The research firm’s $110 price target is derived from applying a 32x multiple to its fiscal 2027 earnings-per-share forecast.
Current market metrics cited include a P/E ratio of 34x and a PEG ratio of 4.95, which the analysis notes implies the stock is trading above its InvestingPro Fair Value. DA Davidson also points to the potential for the company’s forthcoming 2026 outlook and initial guidance to shape the stock’s near-term direction.
Other recent analyst actions and sector commentary
Several other broker actions have surfaced ahead of the print. RBC Capital raised its price target on O’Reilly to $111 and adjusted its earnings-per-share estimate to $0.73, in line with consensus expectations for sales growth. DA Davidson’s reiteration of a Buy and $110 target sits alongside those moves.
Not all responses have been uniformly positive. Evercore ISI added O’Reilly to its Tactical Underperform List, citing a potential 5-10% downside risk after the earnings release. Baird initiated coverage with an Outperform rating and a $115 target, commending the company’s market share gains and returns on invested capital. Wolfe Research downgraded the broader auto parts retail sector to Market Weight, pointing to concerns about potential price declines.
Implications for investors
DA Davidson’s stance is consistent with consensus expectations for modest comparable-store sales growth and an improvement in margins, but the mix of analyst actions underscores a range of views on near-term upside and downside. The firm’s valuation approach and the elevated P/E and PEG figures suggest investors are paying a premium relative to the InvestingPro Fair Value metric cited in the commentary.
Conclusion
As O’Reilly approaches its fourth-quarter 2025 report, the prevailing analyst narrative remains tilted toward cautious optimism: expectations for 5% comparable-store growth and better margins are offset by valuation metrics that indicate a premium and analyst notes that management guidance for 2026 could swing sentiment. The coming earnings release is likely to crystallize which of the competing analyst perspectives gains traction in the market.
Key points and risks below summarize the principal takeaways and uncertainties described in the reporting.