Feedback On Potential NAPA Deal + Store Overlap

研报英文原文证据摘录

Feedback On Potential NAPA Deal + Store Overlap

both in terms of Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

deal type and pricing. While our hypothetical valuation math appears reasonable on framework** = Based on consensus methodology

the surface, the complexity of integrating a heavily franchised business into ORLY's e = Morgan Stanley Research estimates

Quarterly EPS ($)

corporate-operated model is seen as a meaningful risk and a source of concern.

2026e 2026e 2027e 2027e

Quarter 2025 Prior Current Prior Current

3) Bulls point to compelling opportunities around productivity improvements, Q1 0.62 - 0.72 - -

inventory purchasing efficiencies, and cash flow generation. Although the potential Q2 0.78 - 0.87 - -

Q3 0.85 - 0.93 - -

transaction, if it were to be announced, would be operationally complex, bulls are Q4 0.71 - 0.78 - -

intrigued by the synergy potential and take comfort in management's strong track e = Morgan Stanley Research estimates

record of execution.

4) Some investors are dismissive of the deal speculation altogether, viewing

ORLY as one of several interested parties rather than a committed acquirer. This

cohort believes ORLY’s interest would be more selective in nature, with a particular

focus on NAPA's Canadian operations.

5) Our View. Our initial assessment frames the analysis around what a full NAPA

acquisition by ORLY would look like in practice. On balance, we would not be

enthusiastic about the strategic rationale, as it represents a departure from ORLY's

typical approach to growth. ORLY has historically preferred to gain market share

organically rather than acquire a business that carries meaningful risk of customer

Morgan Stanley does and seeks to do business with

or revenue leakage.