We recently published a list of Top 10 Auto Parts Stocks That Could Surge On Trump’s Auto Tariff Relaxation. In this article, we are going to take a look at where LKQ Corporation (NASDAQ:LKQ) stands against other top auto parts stocks that could surge On Trump’s auto tariff relaxation.
The corporate earnings season is about to kick off, but investors have something else on their minds: Donald Trump’s tariffs. Since the beginning of his term, Trump has wreaked havoc on the markets with repeated tariffs, resulting in the S&P index being down nearly 8% for the year.
We have observed that some of the most aggressive tariff policies are soon revoked or relaxed, resulting in a rally that brings back the stock prices to reasonable levels. We saw this recently when Donald Trump hinted that Big Tech companies may not bear the brunt of the tariffs as badly as previously thought. As a result, investors poured their money into these companies, thinking they may be critical for the US infrastructure.
A similar development is forming in the auto sector, with Trump likely to offer some relaxation when it comes to importing auto parts or manufacturing vehicles outside the US. Since auto parts companies are critical to the supply chain of this industry, we decided to take a look at the auto parts stocks that could surge following any news of relaxation in tariffs.
To come up with our list of Top 10 Auto Parts Stocks that could surge following Trump’s auto tariff reprieve, we looked at companies in the auto parts industry with a minimum market cap of $300 million that were outperforming their peers.
A worker in a factory using a robotic arm to assemble automotive body panels.
LKQ Corporation (NASDAQ:LKQ)
LKQ Corporation operates as a distributor of components, replacement parts, and systems used in the maintenance and repair of specialty vehicle aftermarket products and vehicles. It operates in Europe, Self-Service, Wholesale-North America, and Specialty segments. Despite the fact that stock surged over 14% this year, it is still trading 13% below the lowest Wall Street price target of $48.
Q4 2024 proved to be a weak quarter for the company as the revenue declined by 4.1% YoY, missing analyst estimates. However, share repurchases worth $80 million and a free cash flow of $149 million for the quarter meant there wasn’t much for shareholders to worry about.
In 2025, the company expects free cash flow to come in between $750 million and $900 million on an EPS of $3.4 to $3.7. Revenue from North America is expected to stay flat while Europe could show minimal growth. LKQ continues to be a shareholder-friendly company after executing healthy dividends and share repurchases in 2024 and divesting five low-margin businesses in Europe, bringing in $153 million.
Overall, LKQ ranks 3rd on our list of top auto parts stocks that could surge On Trump’s auto tariff relaxation. While we acknowledge the potential of LKQ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LKQ but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
