LKQ Corp stock rises as company sells Self Service segment for $410 million

Investing.com - LKQ Corporation (NASDAQ:LKQ), currently valued at $8.13 billion, announced Tuesday it has agreed to sell its Self Service segment to Pacific Avenue Capital Partners for $410 million, with the transaction expected to close in the fourth quarter of 2025.

The sale price represents 7.6 times the segment’s trailing twelve-month EBITDA of approximately $54 million, or roughly twice its sales, according to Raymond James, which maintained its Outperform rating and $40.00 price target on LKQ stock following the announcement. According to InvestingPro, LKQ’s total EBITDA stands at $1.67 billion, with analysis suggesting the stock is currently undervalued based on its Fair Value model.

LKQ indicated in its release that it will continue to evaluate opportunities to advance its strategic objectives, suggesting additional portfolio review actions may be forthcoming, potentially including the sale of its Specialty segment, which has trailing twelve-month EBITDA of approximately $100 million. With a healthy current ratio of 1.81, InvestingPro data shows LKQ maintains strong liquidity to support its strategic initiatives. Get access to 6 more exclusive ProTips and comprehensive analysis in the Pro Research Report.

The company plans to use proceeds from the Self Service segment sale to reduce debt, with Raymond James estimating after-tax proceeds of approximately $300 million, while noting the transaction could be dilutive to 2026 adjusted earnings per share by approximately $0.06, or about 2%.

The Self Service divestiture follows LKQ’s communication at its September 2024 Investor Day about potential sales of non-core segments, with portfolio review becoming a heightened priority following activist investor involvement, as management noted during its second-quarter 2025 earnings report.

In other recent news, LKQ Corporation has reported its second-quarter 2025 earnings, revealing an earnings per share (EPS) of $0.87, which did not meet the projected $0.92. Despite this, the company’s revenue slightly exceeded expectations, reaching $3.64 billion compared to the anticipated $3.62 billion. Additionally, Raymond James has adjusted its price target for LKQ Corporation to $40, down from $50, while still maintaining an Outperform rating. This adjustment follows LKQ’s second-quarter results, which were described by Raymond James as lacking positive developments due to challenging market conditions in Europe. In corporate governance news, John Mendel has been elected as the new Chairman of the Board of Directors for LKQ Corporation. He succeeds Guhan Subramanian, who will retire from the board on January 1, 2026, after stepping down as Chairman this month. These developments reflect recent shifts in LKQ Corporation’s financial performance and leadership.

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