Why LKQ (LKQ) Shares Are Falling Today

What Happened?

Shares of automotive parts company LKQ (NASDAQ:LKQ) fell 4.5% in the afternoon session after its competitor, Genuine Parts Company (GPC), reported disappointing fourth-quarter financial results, sparking concerns across the auto parts sector. 

Genuine Parts reported that while its revenue grew 4.1% to $6.01 billion, it posted a GAAP net loss of $609 million, compared to a net income of $133 million in the prior-year period. The company's adjusted earnings per share also fell short of consensus estimates. The poor results sent GPC's shares down over 12%. Because GPC is a major distributor of automotive and industrial parts, its weak performance raised investor concerns about the health of the entire industry, negatively impacting peers like LKQ. Separately, Genuine Parts also announced a plan to split its automotive and industrial businesses into two different companies.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy LKQ?

What Is The Market Telling Us

LKQ’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 7 months ago when the stock dropped 21% on the news that the company reported disappointing second-quarter 2025 results and lowered its full-year financial outlook. 

The company's adjusted earnings per share (EPS) fell short of analyst expectations, coming in at $0.87 versus an anticipated $0.92. Revenue declined 1.9% year-over-year to $3.6 billion. Compounding the issue, LKQ lowered its full-year 2025 guidance, projecting a decline in organic revenue and cutting its adjusted EPS forecast to a range of $3.00 to $3.30, down from a prior estimate of $3.40 to $3.70. Management pointed to several challenges, including a delayed recovery in repairable claims in North America, the impact of tariffs, and soft market conditions in both North America and Europe, which contributed to the weaker performance and outlook.

LKQ is up 8.6% since the beginning of the year, but at $32.61 per share, it is still trading 26% below its 52-week high of $44.05 from March 2025. Investors who bought $1,000 worth of LKQ’s shares 5 years ago would now be looking at an investment worth $886.57.

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