LKQ (LKQ) Stock Forecast & Price Target

LKQ has demonstrated a positive financial trajectory, with gross margins improving by 20 basis points year-over-year to reach 44.4%, supported by effective product mix and pricing initiatives. Additionally, segment EBITDA margins increased by 60 basis points to 9.3%, attributable to a 90-basis point improvement in gross margins and successful operational simplification efforts. SG&A expenses also saw a decline, falling to $459 million in Q1/25 from $493 million in the same quarter of the previous year, indicating enhanced operational efficiency amid inflationary pressures.

LKQ reported a 6.5% decline in revenue to $3.46 billion for Q1/25, accompanied by a 3.7% decrease in adjusted EPS to $0.79, indicating weaker financial performance compared to the prior year. The company also experienced a 6.0% decline in segment EBITDA, totaling $404 million, reflecting challenges in maintaining profitability. Additionally, the Specialty segment faced a 100-basis point decline in EBITDA margin to 5.4%, primarily due to reduced organic revenue and ongoing demand softness in the light vehicle and RV product lines.