O'Reilly Automotive, one of the US largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories, issued strong financials for the third quarter of 2015. Revenues increased 11% y-o-y to $2.08 bn on the back of solid comparable store sales growth of 7.9%. Operating income rose 21% to $415 mn, and operating margin advanced 170 basis points to a record 20%. Adjusted earnings per share jumped 23% to $2.53 comfortably beating consensus estimate of $2.36. O’Reilly has a healthy balance sheet and generates solid cash flows, which allows it to buy back shares. During Q3, the company repurchased 1.1 mn shares of its common stock for $274 mn bringing a year-to-date tally to $849 mn. As of September 30, O’Reilly had approximately $400 mn worth of shares remaining under its share repurchase authorization. During the first nine months of 2015, O’Reilly opened 160 new stores across the country, in both new and existing markets. The company plans to open 205 stores in 2015. The total store count across 43 states stood at 4,523 as of September 30. I believe that lower gas prices in the US will prompt people to drive more and put more stress on their cars, and this will fuel demand for parts and services from O'Reilly and its large auto parts retail peers. O’Reilly’s advantages include top-flight services, a deep and broad-based inventory and far-flung distribution capabilities, which translates into industry leading comparable sales growth. These factors, in my opinion, will allow the company to continue to deliver strong financials in the upcoming quarters. Besides, I believe that O’Reilly will continue to pursue aggressive share repurchase policy. I view O'Reilly’s shares as an attractive instrument for medium-term investment. Target price is $280. $ORLY, O'Reilly Automotive, Inc. / 1440