O'Reilly Automotive's (ORLY) Q4 results fell short of lofty expectations from buy-side investors but its long-term outlook remains unchanged, RBC Capital Markets said in a Thursday note.

Buy-side forecasts may have overestimated the tailwind from price hikes on identical products and underestimated how long high costs would linger for the company, RBC analysts said.

Negatives for the stock include ongoing high growth in selling, general and administrative expenses per store due to cost pressures, as well as weakness in the company's Do-It-Yourself segment, which saw sales grow modestly but with higher spending per customer, implying declining store traffic, the analysts said.

Positives include its Professional comparable-store sales rising more than 10%, and gross margin reaching 51.8% on the back of improvements in acquisition costs, effective price management, and and distribution productivity, the analysts said.

The auto parts retail segment is set to benefit from tariff-led inflation, and O'Reilly should continue to grab market share from smaller competitors, the analysts said. They added that they expect the company to continue buying back shares with excess cash, which should result in a 4% to 5% yield on investment.

RBC maintained an outperform rating on the stock and lowered its price target slightly to $109 from $111.

Price: 92.05, Change: -0.81, Percent Change: -0.88