Investing.com - Goldman Sachs downgraded Advance Auto Parts (NYSE: AAP ) from Neutral to Sell on Tuesday, setting a price target of $46.00 amid concerns about the company’s competitive position.

The downgrade reflects Goldman’s view that Advance Auto Parts is likely to underperform peers in the near term, particularly O’Reilly (NASDAQ: ORLY ) Automotive and AutoZone (NYSE: AZO ), according to the research note issued by the investment bank.

Goldman Sachs cited recent visitation data from Placer.ai and survey responses from HundredX suggesting that Advance Auto Parts could be losing market share to competitors in the auto parts retail sector.

The investment bank also expressed a more cautious outlook regarding Advance Auto Parts’ margin recovery prospects, noting that the company’s current valuation appears stretched relative to its historical trading range.

Goldman Sachs stated that Advance Auto Parts’ current 19.5x next-twelve-months price-to-earnings multiple is only justified if a margin recovery materializes, which the firm views as uncertain given the competitive pressures facing the company.

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