CLEVELAND -- NorthCoast Research has reported in its monthly Miles Driven Index that miles driven increased approximately 2.8 percent in February, which followed gains of 0.2 percent and 3.3 percent in January and December, respectively.

“While the index has delivered solid gains in two of the past three months, we are starting to become concerned that accelerating prices at the pump will weigh on consumers' driving behavior,” NorthCoast stated in its research note.

The index closed the third week of March 0.4 percent higher than what was recorded in the prior year, on a rolling four-week basis.

“While one month clearly does not denote a trend, given the deceleration in trends during early March, accelerating price gains at the pump, and more difficult comparisons on a go forward basis, we are starting to wonder if the light vehicle fleet will be able to deliver increases to the aggregate miles driven over the next 12 months,” NorthCoast writes.

“While it is too early to determine if the decreases in the first two months reflect the impact of higher gas prices, a later start to the tax season (refunds arriving later than the prior year), or more adverse winter weather (or a combination of these factors), we do think that the softness warrants investors paying extra attention to the trend in miles driven in the coming months as any ongoing weakness would be an unfavorable development as it relates to intermediate demand trends.”

NorthCoast adds that while there is a delay between changes in miles driven and the impact on the industry, numerous other variables make it difficult to fully understand the correlation between the two. Still, the research firm says it believes a reduction in miles driven will negatively impact investor sentiment in the space (i.e. limits the opportunity for multiple expansion).

“We remain positive on the underlying fundamentals within the automotive aftermarket industry, including the aging of the nation's light vehicle fleet and the ability for consumers to fund vehicle repairs if gas prices don't trump gains on the employment front,” NorthCoast Research disclosed in its note.

NorthCoast Research is an independent, full-service institutional equity research and trading firm headquartered in Cleveland, Ohio. Founded in 2009, the company’s mission is to add value in each phase of the investment process by aligning the company’s goals with those of its clients. NorthCoast aims to provide unbiased, proprietary and actionable fundamental research on select industry verticals and companies, underpinned by comprehensive channel checks across a broad array of industry contacts. The company’s core research verticals are Consumer, Healthcare, Industrial and Business Services.