LKQ Corporation


SKU: LKQ Category:


This is our first report on LKQ Corporation, a leading distributor of automotive spare parts. The company, like most of its auto parts peers, has borne the brunt of supply chain restrictions, inflationary pressures, and volatile commodity prices given the impact of the Omicron surge. However, LKQ started the year with momentum after posting good revenue and profitability in 2021. In terms of revenue and profitability, the company outperformed Wall Street expectations for the first quarter. The company has been looking to expand margins despite the impact of inflation and the management continued with their re-focus strategy through the sale of the PGW aftermarket glass distribution company which generated a lower margin than the wholesale North America segment, so the company will see an increase in EBITDA margin by selling PGW. LKQ appears to be on track to meet its expectations for the business by generating strong free cash conversion and at least $1 billion in free cash flow for the year. We give their stock a ‘Hold’ rating.

Our Report Structure:

⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
⦁ Disclosures

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