Led by O’Reilly Automotive (NASDAQ:ORLY), stocks in the auto parts category closed in the red on Monday, after Barclays warned that growth in the do-it-yourself category will remain sluggish due to continued demand headwinds.

Barclays analyst Seth Sigman reiterated his Equal-Weight rating for O’Reilly Automotive (ORLY) and his $986 price target, but lowered estimates for Q2 and the remainder of 2024.

“Continued weakness broadly across the industry along with some signs of mean reversion for ORLY as it starts to lap more difficult comparisons could limit the upside,” for O’Reilly (ORLY). For Q2, Sigman expects comparable sales to increase by just 2% versus the consensus of +3.7% and from a 3.4% gain in the previous quarter.

Sigman also dropped his Q2 EPS estimate to $10.82 from $11.44, FY24 to $40.70 from $42.14, and FY25 to $46.78 from $46.88.

“Given demand headwinds earlier in the quarter, continuing from Q1, we expect ORLY Q2 2024 to come in below the annual range and current consensus,” Sigman said, adding that, “Exit rate should be better due in part to weather, but underlying trends still seem lighter as we look out.”

Shares of ORLY closed on Monday 3.8% lower, clinging to support at its 200-day moving average of $1,006.59. In sympathy, AutoZone (AZO) was down 4% at the close, and Advance Auto Parts (AAP) was lower by 5.7%.

O’Reilly (ORLY) reports Q2 results on July 26, expected to show an adjusted profit of $11.11 on $4.35B in revenue. Last quarter, the company missed EPS expectations for the first time in seven quarters and missed quarterly revenue expectations for a second straight time.