An FBR Capital Markets analyst downgraded Advance Auto Parts Inc. rating Monday.
Analyst Stephen Chick said in a note to investors that the U.S. auto parts retailer’s earnings in the fourth quarter and next year may fall short of investor expectations as sales growth slows.
Chick pointed out that costly initiatives put in place under CEO Darren Jackson, who took the over the company in January 2008, have not stopped commercial sales growth from slowing since the first quarter.
“We debate the payoff and linearity of management’s investments,” Chick said, lowering his rating to “Underperform” from “Market Perform.”
Chick projected profit of 44 cents per share in the fourth quarter and profit of $2.97 per share in 2010, below the average profit of 46 cents per share in the fourth quarter and $3.27 per share in 2010 noted in a Thomson Reuters survey of analysts. All values in U.S. dollars.