Subject: LKQ
Jim has mentioned this one in the past. LKQ has fallen hard in the past few weeks, apparently for a number of reasons including missing revenue and earnings expectations, lowered guidance, fear of competition, and industry softness.

Morningstar has them at 4 stars, with an average analyst price target of $45, compared to recent market price of $30, suggesting 50% upside, but I imagine this is stale information, so I wouldn't rely on it.

P/E = 11
ROE = 11%

So it's a low price to earnings but not really getting all that much on the ROE side.

Thoughts?

Rob

P.S. To add some color while saving me some typing, here are two AI summaries. One company overview and one analysis of recent stock behavior.

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LKQ Corporation is a leading global provider of alternative and specialty parts to repair and accessorize vehicles. They distribute a wide range of products, including replacement parts, aftermarket collision and mechanical products, recycled parts, refurbished parts, and remanufactured components. Essentially, LKQ helps individuals and businesses find parts for cars, trucks, and other vehicles, offering both new and recycled options.

Here's a more detailed look at what LKQ does:

Recycled and Remanufactured Parts: LKQ specializes in providing recycled and remanufactured original equipment (OE) auto parts for cars and trucks. This includes parts like engines, transmissions, body panels, lights, and more.

Aftermarket Parts: They are also a major distributor of aftermarket parts, which are parts made by companies other than the original vehicle manufacturer.

Specialty Parts: LKQ offers specialty aftermarket products and accessories, including performance and recreational vehicle parts.

LKQ Self-Service: LKQ Pick Your Part is a network of salvage yards where customers can find and remove their own parts at a lower cost.

Global Reach: LKQ operates in North America, Europe, and Taiwan, serving a diverse customer base including collision and mechanical repair shops, dealerships, and retail customers.

Environmental Focus: By offering recycled and remanufactured parts, LKQ contributes to sustainability efforts by reducing the need for new parts and minimizing waste

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Based on recent news and analysis, LKQ Corporation's stock price has fallen primarily due to a combination of factors:

Disappointing Financial Results & Guidance: LKQ reported adjusted earnings per share (EPS) of $0.87 for the second quarter of 2025, missing analysts' expectations. Revenue also declined by 1.9% year-over-year.

Reduced Full-Year Outlook: The company significantly lowered its full-year 2025 financial guidance, cutting its adjusted EPS forecast and projecting a decline in organic revenue.

Weak North American Repairable Claims: A delayed recovery and ongoing weakness in repairable claims in North America negatively impacted demand for LKQ's products. High insurance premiums and repair costs are causing some drivers to delay or forgo repairs, according to Sherwood News.

Soft Market Conditions in Europe: Difficult macroeconomic conditions in Europe also contributed to the weaker performance.

Tariff Uncertainty: Uncertainty surrounding tariffs has added to the economic pressure and dampened consumer confidence, affecting discretionary spending on parts like those in LKQ's specialty vehicle business.

Operational Challenges: Despite cost reduction efforts, LKQ faces ongoing challenges in achieving desired improvements in its operations.

Competition: The automotive parts and services industry is competitive, and competitors with innovative products or better pricing strategies could challenge LKQ's market position.

In essence, a confluence of macroeconomic headwinds, particularly in North America and Europe, combined with lower-than-anticipated repair volumes and a cautious revised outlook, have weighed heavily on LKQ's stock performance.