We increase our 12-month price target by $20 to $105, based on 30.9x our FY 22 (Jul.) EPS estimate, a premium to the stock's historic average P/E multiples, justified by its strong balance sheet and growth potential. We raise our adjusted EPS estimates by $0.50 to $3.10 for FY 21 and introduce FY 22 at $3.40. CPRT posts Jul-Q adjusted EPS of $0.69 vs. $0.60 (+15%), well ahead of the $0.38 consensus. The massive beat was driven both by a better-than-expected top line and stronger margins, as revenue fell 3.1% to $525.7M ($89.3M ahead of consensus) and gross margins expanded 190 bps to 47.6% (650 bps ahead of consensus). We maintain a Hold on valuation, but clearly the steep drop in miles driven has not weighed on CPRT's near-term results as much as had been anticipated. CPRT's balance sheet remains strong (net cash) and it has been investing more for growth than it has in past years, as capex (including acquisitions) increased to $604M in FY 20 from $375M in FY 19, which should help drive additional EPS growth.
|--Analyst Actions: RBC Capital Adjusts Kinder Morgan...|
|Ingevity Sees Higher Q3 Earnings, Projects Sales Dec...|
|Analyst Actions: RBC Capital Adjusts Genuine Parts' ...|
|Analyst Actions: RBC Capital Adjusts Price Target on...|
|Immunic Receives $29 Million From European Investmen...|