Advance Auto Parts’ Stock To Continue Its Rise?

Advance Auto Parts’ stock (NYSE: AAP), an automotive aftermarket parts provider, has risen by 4.8% in the last week. The company recently announced a multi-year agreement with Bridgestone Retail Operations wherein Bridgestone Retail Operation will stock DieHard batteries of Advance Auto Parts at more than 2,000 tire and vehicle service centers across the US.

But will the company’s stock continue to rise over the coming weeks, or is a decline in the stock imminent? Based on trends in the company’s stock price over the last 9 years, the Trefis Machine Learning Engine finds that average returns for AAP stock to be around 1.6% in the next one-month (twenty-one trading days) period after experiencing a 4.8% rise in a week (five trading days).

According to the Trefis Machine Learning Engine, Advance Auto Parts’ stock price forecast for a month from now is around $219 – up 1.6% from its current market price of roughly $215. But how would these numbers change if you are interested in holding Advance Auto Parts’ stock for a shorter or a longer time period? You can test the answer and many other combinations on the interactive dashboard. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

And if you are considering Advance Auto Parts’ stock as an investment option over a larger time frame, you can explore our forecast for Advance Auto Parts valuation.

MACHINE LEARNING ENGINE – try it yourself:

IF AAP stock moved by -5% over five trading days, THEN over the next twenty-one trading days, AAP stock moves an average of 2.6% with a 56.4% probability of a positive return over this period.

Some Fun Scenarios, FAQs & Making Sense of Advance Auto Parts Stock Movements:

Question 1: Is the price forecast for Advance Auto Parts stock higher after a drop?

Answer:

Consider two situations,

Case 1: Advance Auto Parts stock drops by -5% or more in a week

Case 2: Advance Auto Parts stock rises by 5% or more in a week

 Is the price forecast for Advance Auto Parts stock higher over the subsequent month after Case 1 or Case 2?

 AAP stock fares better after Case 1, with an expected return of 2.5% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus an expected return of 1.6% for Case 2. This implies a price forecast of $221 in Case 1 and a figure of $219 in Case 2 using AAP market price of $215.48 on 9/28/2021.

 In comparison, the S&P 500 has an expected return of 3.1% over the next 21 trading days under Case 1, and an expected return of just 0.5% for Case 2 as detailed in our dashboard that details the expected return for the S&P 500 after a rise or drop.

 Try the Trefis machine learning engine above to see for yourself how the forecast for Advance Auto Parts stock is likely to change after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold Advance Auto Parts stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks! 

 For AAP stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for Advance Auto Parts after a larger loss over the last week, month, or quarter.

Question 3: What about the stock price forecast after a rise if you wait for a while?

Answer:

The expected return after a rise is understandably lower than after a drop as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although AAP stock appears to be an exception to this general observation.

AAP’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for Advance Auto Parts stock by changing the inputs in the charts above.

While Advance Auto Parts stock is likely to move higher in the near term, there are several peers in its sector that look like a Better Bet Than AAP stock. Also, Advance Auto Parts Peer Comparisons summarizes how the company fares against peers on metrics that matter.

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