Bull -
- Growth in miles driven increases the wear and tear on vehicles, requiring more maintenance and repair work to keep them on the road, benefiting LKQ.
- LKQ’s collision business could see rising demand from increasing auto claims as more drivers return to the road following the COVID-19 pandemic.
- Increasing adoption of hybrid vehicles presents new revenue opportunities for LKQ, such as new battery-related parts, in addition to its ICE-related parts.
Bear
- Increasing adoption of ADAS technology could lead to a reduction in the number of auto accidents, pressuring LKQ’s collision business.
- The company’s 1 LKQ Europe initiative could face challenges in rationalizing its product portfolio and improving its procurement systems.
- Bottlenecks in the ocean freight industry could extend the average time it takes for LKQ’s imported aftermarket parts to reach its operating regions, making it difficult for the firm to maintain its high order fulfillment rates.
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Disclaimer
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