O’Reilly Automotive’s Stock Price Uptrend Will Continue in 2026
Investors wondering if O’Reilly Automotive's (NASDAQ: ORLY) uptrend will continue in 2026 can rest assured that the Q3 earnings report provides no reason to believe it won’t. The report was not robust, but it aligns with trends that suggest this company will sustain a moderately high single-digit growth pace and margin strength for the foreseeable future.
Among the critical takeaways is that O’Reilly, like its competitor AutoZone (NYSE: AZO), is a cash flow and share buyback machine, reducing its share count significantly each year and is expected to continue doing so long into the future.
There is some concern about O’Reilly’s valuation, but the premium is deserved. The stock trades at 35x its current-year earnings, compared with 25x for AutoZone and approximately 23x earnings for the average S&P 500 company, pricing in outperformance, the growth outlook, and share repurchases. Like its competitor, O'Reilly aggressively repurchases shares and is on track to reduce its share count by more than 3% on average in the current fiscal year.
The primary difference is that AutoZone grew more slowly in calendar 2025; however, it is expected to accelerate in 2026, matching O’Reilly’s growth pace, suggesting it is a better value in 2025. In this scenario, both stocks can trend higher in 2026, but AZO may outperform as its market reassesses the outlook. The two retail stocks trade at 10-to-13x earnings relative to the 2035 consensus and could double in price over the coming years.
O’Reilly Automotive’s Beat-and-Raise Quarter Aligns With Long-Term Trends
O’Reilly Automotive had a solid quarter with revenue growing by 8% to $4.71 billion. The growth compares well with AutoZone’s 0.6% in the comparable quarter and the consensus estimate, outpacing them by more than 40 basis points. An increased store count and market penetration drove strength. Comps grew by 5.6%, and the company reported market-share gains. The store count grew by nearly 4% YOY and is expected to continue increasing at a low-single-digit pace in the upcoming year.
Margin is another area of strength. The company managed to control costs and tariff impacts, eking out a narrow margin improvement and accelerated income growth. The operating margin improved by 20 basis points, driving a 9% increase in operating and net income and a 12% increase in GAAP earnings.
O’Reilly’s guidance aligns with its stock price uptrend, including an improved expectation for full-year growth and earnings quality to align with MarketBeat’s consensus estimate. Revenue is expected to grow approximately 6% for the year, driven by a 4% to 5% comp and new stores.
Analysts and Institutions Are Driving This Market
Analysts and institutional investors are bullish on this market, increasing its stock price. Not only are analysts bullish on this stock—90% of the 20 tracked by MarketBeat rate it a Buy—but the price target revision trend is positive, and institutions are buying.
As of late October, the consensus forecast of $111 points to a new all-time high, with recent targets, including the first to be released after the Q3 report, pointing to even higher prices. The high end of the range is at $125 and may be reached by the middle of calendar 2026.
The risk for investors is the recent stock split. It is unlikely to lead this market into a reversal, but it could cause volatility in the upcoming quarters. Stocks that split tend to experience a volatile period following the split as portfolios are readjusted and profits are taken: this stock has yet to experience one.
Besides that, this market is in a technical uptrend and likely to continue higher over the long term. Volatility in late 2025 or early 2026, resulting in price pullbacks, will be a buying opportunity.
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