Stephens initiates coverage on LKQ Corp with 'overweight' rating

Stephens initiates coverage on auto parts distributor LKQ Corp LKQ.O with "overweight" rating and price target of $39

PT represents an upside of 38.4% to stock's last close

Shares of LKQ rise nearly 1.5% premarket

Brokerage says LKQ maintains a differentiated position in the U.S. as the only distributor of both aftermarket and salvage parts

Says co's transition to operational value creation, from mostly financial engineering, is an under-appreciated and substantive element of the LKQ stock story

Reuters recently reported that LKQ is pursuing a sale of its specialty division, which is only ~7.5% of its total EBITDA but could yield $750 mln to $1 bln in additional cash

Eight of 11 brokerages rate the stock "buy" or higher, three "hold"; median PT is $41.5 - data compiled by LSEG

As of last close, shares down 23.4% YTD