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O'Reilly Automotive's Stock Price Uptrend Will Continue in 2026
Written by Thomas Hughes. Published 10/23/2025.
Key Points
- O'Reilly is a buy-and-hold stock in an uptrend that is unlikely to end.
- The company's growth, cash flow, and share buybacks drive shareholder value.
- Institutions and analyst trends agree that ORLY stock is a good buy and is heading higher in the upcoming quarters.
Investors wondering if O’Reilly Automotive's (NASDAQ: ORLY) uptrend will continue in 2026 can take reassurance from the Q3 earnings report: it gives no reason to expect a reversal. The quarter was not spectacular, but it aligns with longer-term trends that suggest the company can sustain moderately high single-digit growth and margin strength for the foreseeable future.
One key takeaway is that O’Reilly, like competitor AutoZone (NYSE: AZO), is a cash-flow and share-buyback machine. It reduces its share count significantly each year and is expected to continue doing so well into the future.
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See how the Weekend Income play works hereThere is some concern about O’Reilly’s valuation, but the premium is deserved. The stock trades at about 35x current-year earnings, versus roughly 25x for AutoZone and about 23x for the average S&P 500 company, pricing in outperformance, the growth outlook, and ongoing repurchases. Like AutoZone, O’Reilly is aggressively repurchasing shares and is on track to reduce its share count by more than 3% on average in the current fiscal year.
The primary difference is that AutoZone grew more slowly in calendar 2025; however, it is expected to accelerate in 2026 and match O’Reilly’s growth pace, making AZO a better value in 2025. In that scenario, both stocks can trend higher in 2026, but AZO may outperform as the market reassesses its outlook. The two retail names trade at roughly 10–13x earnings relative to the long-term consensus and could potentially double in price over the coming years.
O’Reilly Automotive’s Beat-and-Raise Quarter Aligns With Long-Term Trends
O’Reilly Automotive had a solid quarter, with revenue up 8% to $4.71 billion. That growth compares favorably with AutoZone’s 0.6% in the comparable quarter and outpaced consensus by more than 40 basis points. Strength came from increased store count and market penetration: comparable-store sales rose 5.6%, and the company reported market-share gains. The store count grew by nearly 4% year-over-year (YOY) and is expected to continue increasing at a low-single-digit pace next year.
Margins were another area of strength. Management controlled costs and tariff impacts, delivering a narrow margin improvement and accelerating earnings growth. Operating margin improved by 20 basis points, helping drive a 9% increase in operating and net income and a 12% rise in GAAP earnings.
O’Reilly’s guidance supports the stock’s uptrend, including an improved outlook for full-year growth and earnings quality that aligns with MarketBeat’s consensus. Revenue is expected to grow roughly 6% for the year, driven by a 4%–5% comp and new stores.
Analysts and Institutions Are Driving This Market
Analysts and institutional investors are bullish on the stock, helping push the price higher. Ninety percent of the 20 analysts tracked by MarketBeat rate it a Buy, price-target revisions are trending upward, and institutions have been adding shares.
As of late October, the consensus forecast of $111 points to a new all-time high, with the high end of the range near $125 — a level that could be reached by mid-2026 according to recent targets, including those released after the Q3 report.
A key risk for investors is a stock split. While a split is unlikely to reverse the long-term uptrend, it can cause short-term volatility as portfolios are adjusted and profits are taken. O’Reilly has not experienced that kind of post-split volatility recently, but investors should be prepared for possible price swings in the quarters following a split.
Otherwise, the stock is in a technical uptrend and is likely to continue higher over the long term. Any volatility in late 2025 or early 2026 that produces price pullbacks should be viewed as a potential buying opportunity.
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