O'Reilly Automotive (NASDAQ:ORLY) had their EPS estimates raised by Goldman Sachs (NYSE:GS) after they said they're going to buyback $500 million in shares.
Goldman boosted their full year 2011 and 2012 EPS estimates in response from $3.60 and $4.00 to $3.65 and $4.20. Goldman added 2012 EPS estimates could reach as high as $4.33.
O'Reilly also announced they're going to exit what they consider restrictive financing in connection with its CSK acquisition via changing the design of their capital structure.
This should release the $500 million to repurchase stocks as free cash flow grows over the next couple of years, says O'Reilly. The $500 million buyback is to be performed over a 3-year period.
Goldman Sachs reiterates their "Neutral" rating on O'Reilly, which closed Wednesday at $57.16, gaining $0.91, or 1.62 percent.
Thursday, January 13, 2011
O'Reilly Automotive (NASDAQ:ORLY) EPS Estimates Boosted on Share Buyback
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1 comment:
As the economy begins to rebound, firms find themselves with more and more extra cash on hand. Conventional wisdom tells them to return it to shareholders via dividends and share buybacks (Just like O'Rilley is doing here).
We would strongly AGAINST this; our research shows that returning cash to shareholders does not reap the rewards it should, and that firms are better off using the cash for long-term capital investments.
Matt Martell
CEB Views
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