Why Advance Auto Parts Stock Slumped Today

Auto parts retailer Advance Auto Parts (NYSE: AAP) stock tumbled 6.7% through 11:55 a.m. ET Tuesday after Wall Street banker Evercore ISI cut its price target to $58 per share.

Evercore can't be blamed for the entirety of Advance Auto's losses today, however. I actually suspect investors are punishing the stock more for what its rival, AutoZone (NYSE: AZO), said this morning.

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AutoZone earnings are Advance Auto's problem

Reporting earnings for its fiscal Q1 2026 today, AutoZone said its quarterly sales were up 8% year over year at $4.6 billion, and same-store sales grew 5.5%.

Neither number was "bad," exactly. But AutoZone nonetheless fell short of analyst forecasts for Q1 sales and earnings, both. Earnings per share of $31.04 looked particularly bad in light of forecasts for $32.40, hurt by a big two percentage-point decline in gross margin, and operating costs that increased as a percentage of sales.

On the bottom line, that worked out to a 5% drop in AutoZone's earnings per share.

What does this mean for Advance Auto Parts stock?

AutoZone and Advance Auto Parts both compete in the automotive parts market (obviously). Investors seem to be thinking that if business isn't great for AutoZone, a strong and profitable performer in this market, it's probably even worse for Advance Auto Parts -- a much weaker performer, and unprofitable in three of its last six reported quarters.

To me, this seems a more likely reason -- and a better reason -- for Advance Auto Parts to be selling off today than the mere fact of a random analyst tweaking its Advance Auto price target $2 lower.

It's also a better reason for you to consider selling Advance Auto Parts stock.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.