AutoZone on Track to Beat Earnings Estimates

The Memphis, Tennessee-based auto parts retailer AutoZone is expected to report earnings per share of $20.78 in the fiscal first quarter, which represents year-over-year growth of about 12% from $18.61 per share seen in the same period a year ago.

The company, which is a major retailer and distributor of automotive replacement parts and accessories, is on track to beat earnings per share estimates again after having beaten it for 12 consecutive quarters. The company is expected to post revenue growth of about 6% to $3.33 billion.

The company is expected to earn $97.73 per share and generate $14.81 billion in revenue for the entire fiscal year, according to Zacks Research. These results demonstrate increases of 2.67 % and 1.22 % over last year, respectively.

AutoZone’s better-than-expected third-quarter earnings results, which will be announced on Tuesday, December 7 before the market opens, could help the stock recoup recent losses. The company’s shares closed about 1.2% lower at $1,817.07 on Tuesday. The stock surged over 53% so far this year.

AutoZone Stock Price Forecast

Fourteen analysts who offered stock ratings for AutoZone in the last three months forecast the average price in 12 months of $1,830.71 with a high forecast of $2,050.00 and a low forecast of $1,490.00.

The average price target represents a -0.56% change from the last price of $1,840.95. From those 14 analysts, nine rated “Buy”, four rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $1,710 with a high of $2,190 under a bull scenario and $1,100 under the worst-case scenario. The firm gave an “Equal-weight” rating on the leading auto parts retailer’s stock.

Several other analysts have also updated their stock outlook. Wells Fargo raised the target price to $2050 from $1825. CFRA lifted the target price by $125 to $1,925.

Technical analysis suggests it is good to buy as 100-day Moving Average, and 100-200-day MACD Oscillator signals a strong buying opportunity.

Analyst Comments

“We see AutoZone (AZO) as a high-quality retailer with the ability to compound earnings/FCF growth over time. While not immune to a tougher macro backdrop (fewer miles driven), we believe AZO is best positioned through any recession given its leading exposure to the more defensive DIY segment (~80% of sales),” noted Simeon Gutman, equity analyst at Morgan Stanley.

“In addition, its DIFM growth was accelerating pre-COVID and we think it can gain more share in that segment going forward. In our view, ongoing share gains coupled with solid expense management should allow AZO to overcome headwinds from less driving in the near- to medium-term. These advantages seem priced in currently.”

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