On Monday, Evercore ISI maintained its Outperform rating and a $3,390.00 price target for AutoZone (NYSE: NYSE:AZO) stock, currently trading at $3,309.44 with a market capitalization of $55.9 billion, ahead of the company's fiscal first quarter results expected to be released on Tuesday before the market opens.
The firm anticipates AutoZone to continue its strong performance, reflecting the company's defensive growth attributes. Despite some volatility in top-line growth, AutoZone shares have risen 29% compared to the S&P Retail Select Industry Index (XRT), which is up 16%, and the S&P 500's 28% increase.
AutoZone is expected to report comparable store sales in the range of 0.5-1% domestically, which is consistent with or slightly ahead of the previous quarter. The earnings per share (EPS) are projected to be $34, compared to the consensus estimate of $33.65.
According to InvestingPro data, the company has demonstrated solid revenue growth of 5.92% over the last twelve months, with 12 exclusive ProTips available for subscribers analyzing the company's financial health and market position. The analyst highlighted AutoZone's potential to gain market share in a sluggish auto aftermarket environment through 2025, driven by enhanced inventory availability and in-store execution.
The company's five-year comparable sales growth of 37% surpasses that of public peers like Genuine Parts Company (NYSE:GPC) (NAPA) at 10% and Advance Auto Parts (NYSE:AAP) at 13%, although it trails behind O'Reilly (NASDAQ:ORLY) Automotive's near 50% growth.
Trading at a P/E ratio of 21.47, AutoZone's valuation reflects its strong market position. For deeper competitive analysis and comprehensive peer comparisons, investors can access the full Pro Research Report available on InvestingPro.
Evercore ISI expects AutoZone to accelerate its Direct-to-Consumer (DIFM) business into 2025 as weather conditions normalize and the company continues to roll out mega hubs and faster delivery services.
The analyst noted signs of disinflation normalizing into 2025, with pent-up demand from declining industry transaction volumes potentially boosting demand with a return to normal winter weather. Insights from the AAPEX auto aftermarket conference in Las Vegas, including conversations with suppliers, competitors, and AutoZone's CFO Jamere Jackson, confirmed solid traction on the company's growth initiatives both domestically and internationally.
AutoZone's consistent fundamentals and capital stewardship are seen as key factors that will likely continue to drive its stock performance. With a beta of 0.72, the stock demonstrates relatively low volatility, though InvestingPro's Fair Value analysis suggests the stock is slightly overvalued at current levels.
The price target of $3,390 is based on an approximate 18.5 times the calendar year 2026 earnings per share, reflecting the attractiveness of AutoZone's defensive growth and pricing power in the face of a sluggish lower-income consumer environment and potential tariff uncertainties.
While O'Reilly Automotive remains Evercore ISI's top pick in the auto aftermarket sector due to more consistent share gains, AutoZone is also expected to benefit from the potential normalization of competitive and share trends into 2025.
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