Lehman Brothers Upgrades CSK Auto

Analyst Alan Rifkin says the company is gaining traction

Lehman Brothers upgraded CSK Auto (CAO ) to buy from market perform.

Analyst Alan Rifkin says the company is gaining traction. He believes improved vendor terms, enhanced inventories, and ongoing favorable industry trends will begin to drive momentum in EPS in 2002. He also noted a record number of licensed drivers, more rational pricing environment, and aging SUVs.

Rifkin sees first quarter sales ahead of plan, with comps up 9%-10% vs. his current 6% forecast. He says the near-term benefits of its profitability enhancement program are beginning to take hold, yielding margin improvement. He sees EPS of $0.71 in fiscal year 2003 (Jan.) and $0.85 in fiscal year 2004. He raised his $10 12-month price target to $15.

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