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A vehicle pulls out of a parking space outside an Advance Auto Parts Inc. store in Peoria, Illinois.
Jefferies is upgrading Advance Auto Parts to buy from hold despite significant company setbacks in the first half of the year.
“While near-term results likely remain weak, we believe the ‘new’ management team’s initiatives can drive significant longer-term margin expansion and expect an inflection in H2 ’17,” wrote Jefferies analyst Bret Jordan in Friday’s note.
Advance Auto Parts (AAP) shares plunged 39 percent year to date, but the equity analyst noted that AAP is relatively well positioned in its online competition, given the company’s 58 percent commercial mix.