I remain upbeat about the shares of O'Reilly Automotive (ORLY), one of the US largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories. The company’s financials for the third quarter of 2016 were decent. Revenues went up 6.7% y-o-y to $2.22 bn, in line with consensus estimate. The improvement was driven by same-store sales growth of 4.2%. Operating income rose 8% to $448 mn, and operating margin expanded 20 basis points to a record 20.2%. Adjusted earnings per share grew 9.8% to $2.90 but missed analysts’ average projection by 2 cents.O'Reilly ended Q3 with cash and cash equivalents of $560.3 mn and long-term debt of about $1.9 bn. In the first nine months of 2016, the company generated operating cash flow of $1.2 bn (up 9.9% y-o-y) and spent $356.2 mn on capex. O'Reilly also repurchased around 4 mn shares for $1.03 bn year-to-date and has $613 mn remaining under its current share repurchase authorizations.During Q3, O’Reilly opened 52 stores, which brings year-to-date store openings to 141 (net), and is on track to achieve its target of 210 new store openings in 2016. Besides, recently, the company announced that it had entered into a definitive agreement to purchase substantially all of the assets of Bond Auto Parts, a privately held automotive parts supplier, which operates 48 stores in Vermont, New Hampshire, Massachusetts and New York. The deal is expected to substantially increase O'Reilly’s exposure in the Northeast.O'Reilly’s management slightly tweaked its outlook for full year 2016. The company anticipates annual revenues in the band of $8.5-8.6 bn, and operating margin is expected to be 19.5-19.9%. Same store sales are projected to increase 4-5%. O'Reilly also forecasts 2016 adjusted EPS of $10.58-10.68 and plans to generate free cash flow of $850-900 mn.In my opinion, a significant decline of O'Reilly’s shares following Q3 earnings miss was excessive given the company's still solid fundamentals. The stock is trading above $260 support level and, I believe, is well positioned for a rebound, with medium-term target at $300. $ORLY, O'Reilly Automotive, Inc. / 1440