The Bull Case For LKQ (LKQ) Could Change Following Planned Keystone Sale And Portfolio Simplification – Learn Why

• In December 2025, LKQ Corp said it had begun a formal process to sell its Keystone Automotive specialty parts division for a reported US$500 million to US$1.00 billion, as part of a broader portfolio simplification that also included the earlier US$410 million sale of its Pick Your Part business.
• The move follows pressure from activist investors, including Ananym Capital Management LP, urging LKQ to shed non-core operations and concentrate resources on its core North American business.
• Against this backdrop, we’ll examine how LKQ’s planned Keystone divestiture could reshape its investment narrative around portfolio simplification and focus.

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LKQ Investment Narrative Recap

To own LKQ, you need to believe that its core auto parts distribution business can grind through modest growth and margin pressure while management simplifies the portfolio and tightens execution. The Keystone sale process fits that story by potentially sharpening the focus on North America, but it does not remove the near term risk around soft organic revenue trends and underperforming European operations.

One recent move that ties directly into this simplification theme is LKQ’s completed US$410 million sale of its Pick Your Part self service segment. Together with the proposed US$500 million to US$1,000 million Keystone divestiture, it underlines how much the company is leaning on portfolio reshaping to support its cost reduction and margin improvement efforts over the next few years.

Yet while the portfolio is getting simpler, investors should also be aware that LKQ’s multi year transformation plan still rests heavily on aggressive cost cutting and...

Read the full narrative on LKQ (it's free!)

LKQ's narrative projects $14.9 billion revenue and $875.0 million earnings by 2028. This requires 2.0% yearly revenue growth and a $167.0 million earnings increase from $708.0 million today.

Uncover how LKQ's forecasts yield a $41.19 fair value, a 37% upside to its current price.

Exploring Other Perspectives

Four Simply Wall St Community valuations for LKQ span roughly US$41 to US$66 per share, underlining how far apart individual views can be. You are seeing those opinions form against a backdrop where execution on cost cuts and portfolio simplification is a key swing factor for LKQ’s future performance, so it can be useful to compare several of these perspectives before deciding how you feel about the stock.

Explore 4 other fair value estimates on LKQ - why the stock might be worth over 2x more than the current price!

Build Your Own LKQ Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your LKQ research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free LKQ research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate LKQ's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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