Morgan Stanley Updates View on Advance Auto Parts (AAP) in 2026 Retail Outlook

Advance Auto Parts, Inc. (NYSE:AAP) is included among the 14 Best Mid-Cap Dividend Stocks to Buy Now.

On January 15, Morgan Stanley analyst Simeon Gutman cut his price target on Advance Auto Parts, Inc. (NYSE:AAP) to $45 from $55, while keeping an Equal Weight rating on the stock. The update came as part of the firm’s 2026 outlook for hardline, broadline, and food retail names.

Advance Auto has been in the middle of a major reshaping effort under CEO Shane O’Kelly, who took the role in September 2023. As part of that turnaround, the company shut down more than 700 locations to streamline the business and concentrate on markets where it believes it holds a “No. 1 or No. 2 position based on store density,” according to management. Even with the closures, Advance still plans to expand in a more targeted way, aiming to open 100 new stores through 2027, on top of the 30 it already opened in 2025.

A big part of the refreshed strategy centers around what the company calls “market hub” stores. These locations are designed to carry 3 to 4 times more SKUs than a typical Advance store and support faster fulfillment. The company is also working to strengthen its same-day parts delivery capabilities, which is especially important for professional installers who depend on quick turnaround.

Advance Auto Parts, Inc. (NYSE:AAP) is one of the largest automotive aftermarket parts retailers in North America, serving professional mechanics, DIY customers, and independently owned operators.

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Disclosure: None.