AAP Stock Forecast & Price Target

Advance Auto Parts is viewed positively because its operating model is showing tangible improvement, with 2Q adjusted operating margin expanding 260 bps year over year to 5.6% and gross margin rising to 46.2% on merchandising gains and a $26M tariff refund benefit. The outlook is also supported by improving Pro-channel momentum, as Pro comps were positive throughout the quarter, main street Pro outperformed the total Pro business by more than 200 bps, and new as well as existing accounts contributed to growth. Management’s plan to recapture market share and drive cost out of the business, combined with 2026 comp sales modeled at +1.5% to +2.2% and EPS estimates of $3.48 to $3.80 under upside cases, suggests further margin and earnings leverage.

Advance Auto Parts is facing a weak fundamental setup because comps remain volatile and have recently been pressured by unfavorable weather, tougher compares, and softer DIY demand from budget-constrained consumers. Margin recovery also looks fragile, with gross margin expected to slip to 44.6% in 3Q and 44.4% in 4Q as tariff refunds roll off, freight and fuel costs stay elevated, and mix shifts toward Pro, while 3Q adj. EPS is seen down 11% y/y to $0.82 and 4Q down 71% y/y to $0.25. Even with some progress on SG&A, the implied 2H26 operating margin midpoint of 3.7% is below consensus, reinforcing concerns that top-line growth and profitability may lag peers.