先进汽车配件公司（AAP）“如今全是滚珠轴承”

''It's All Ball Bearings These Days" Key Points: 1) Initiate coverage on AAP 2030s, 2032s, and2033s at UW and 2027s and 2028s at MW; 2) WHR trades evenbut with closer negative-event risk; 3) Gap widening betweenAZO/ORLY and AAP; 4) We estimate $422mn FYE25 EBITDAand $523mn for 2026. Hale Holden+1 212 412 1524hale.holden@barclays.comBCI, US Carolyn Popelka+1 212 526 0935carolynanne.popelka@barclays.comBCI, US Investment Recommendation The Quick Take: We initiate coverage of AAP 2027s and 2028s with a Market Weight recommendation and theAAP 2030s, 2032s, and 2033 notes with an Underweight. We view WHR as having moreimmediate downside risk than AAP, and both are trading on top of each other. We havedifficultybridging to the 2027 margin targets and believe the near-term performance outlook for APP ischoppy. Set Up: Advance Auto's inaugural HY bond is trading well with the 2033s at 243bp and the 2030s at228bp,effectivelyon top of the Whirlpool 30s and 33s (which we rate Underweight), andcompared to the BB index at 160bp. The issuance ballooned AAP's cash balance to ~-about $3bn, allowing it to fully collateralize the$3.2bn supply chain finance program and serve as a backstop should it shrink (not animpossible scenario following the First Brands news). The company also completed the sale ofits Worldpac division for $1.5bn to Carlyle in November 2022 with the net proceeds of $1.2bnused to improve the balance sheet. The two actions combined have helped derisk the creditdespite the company's operational issues. Last, the company noted it exited 2Q with salesmomentum which could suggest that the lower end of FYE guidance is conservative. We view the macro backdrop for auto parts (both DIY and DIFM) as constructive given the age ofthe car park is at 12.8 years (near record high) and US vehicle miles traveled are now above pre-pandemic levels (if only marginally). In addition, the increase in weight of new vehicles shouldwear out component parts faster. The combination should be constructive foraftermarketauto-part industry growth in the low to mid-single growth range. We do view the store / hub and spoke distribution network of theaftermarketparts retailers asofferinga fairly decent moat against online part services such as Amazon, EBay, RockAuto,and/or Parts Geek given the ability to deliver to DIFM customers in most cases within an hour. Thisdocument is intended for institutional investors and is not subject to all of theindependence and disclosure standards applicable to debt research reports prepared for retailinvestors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for itsown account and on a discretionary basis on behalf of certain clients. Such trading interestsmay be contrary to the recommendationsofferedin this report. Please see analyst certifications and important disclosures beginning on page 14.Completed: 03-Oct-25, 18:12 GMTReleased: 06-Oct-25, 10:00 GMTRestricted - External What Needs To Happen: Advance has materially lower EBITDA margins than O'Reilly, NAPA, and/or AutoZone. Ithistorically has had operational issues related to out of stocks (which is detrimental for thismodel, particularly for DIFM customers) and has underinvested in its store capex (80% of HVACsbeyond useful life, 50% of roofs beyond useful life, 50% of parking lots beyond useful life) whichhurts the DIY customer experience. In November 2024, the company outlined a multiyear turnaround plan which included: 1) ~700store closures; 2) improvement in COGS; 3) consolidation of distribution centers from 38 to 12by 2026; 4) building 60 market hubs by mid-2027; and 5) leveraging automation. The company istargeting a 7% adjusted operating income margin by 2027. As of 2Q25, the company had made some progress with the market hub rollout, DCconsolidation, and 30-40 minute delivery times. We estimate FYE25 adjusted operating marginsto be just under 2% so the bridge to 7% in 2027 seems optimistic to us, given 2026 may also bean investment year. Where This Leaves Us While there are early signs of progress, guidance for H2 remains wide and we find the bridge to2027 to be a considerablelift.We also view AAP as likely to lag larger, better-operated peers(O'Reilly, AutoZone ) and remain the third operator in most markets. We are currently estimating FYE25 EBITDA at $422mn and FYE26 EBITDA at $523mn whichresults in gross / net leverage of 8.2x/0.8x for FYE25 and 6.6x/0.6x for FY26E. We initiate coverage of AAP 2027 and 2028 bonds at Market Weight. The 2027s are trading at a130bp spread while the 2028s are at 113bp. Our Market Weight reflects the notes' shorterduration, the company's ample liquidity, and what we believe is likely an operational trough. We initiate AAP 7% 2030s, 3.5% 20343s and 7.375% 2033s at Underweight. Our Underweightreflects the large improvement in margins required to get to the 2027 targets, combined with amore uncertain near-term sales environment. With the credit market at a