Street Calls of the Week
Investing.com - TD Cowen has raised its price target on AutoZone (NYSE:AZO) to $4,900 from $4,300 while maintaining a Buy rating on the auto parts retailer. The stock, currently trading near its 52-week high of $4,388.11, has delivered an impressive 32.19% return year-to-date. According to InvestingPro analysis, the company appears to be trading above its Fair Value.
The firm expects AutoZone to deliver strong domestic comparable sales growth of approximately 4.7%, primarily driven by the Do-It-For-Me (DIFM) segment, which is approaching 10% growth.
TD Cowen attributes the projected DIFM segment performance to an increase in same-SKU inflation and continued market share gains for the company.
Despite the positive sales outlook, the firm has trimmed its operating margin expectations to 20.0% due to higher LIFO (Last-In-First-Out) inventory accounting impacts and ongoing selling, general, and administrative (SG&A) investments.
TD Cowen remains constructive on AutoZone’s opportunity to gain market share in the DIFM segment, citing better execution, benefits from investments, and tariff-related disruptions affecting competitors.
In other recent news, AutoZone has seen several adjustments to its stock price targets by various analyst firms ahead of its fiscal fourth-quarter earnings report. Evercore ISI raised its price target to $4,500, maintaining an Outperform rating, with expectations of a 4.5% increase in same-store sales driven by Do-It-For-Me initiatives and tariff-related price increases. Truist Securities increased their target to $4,504, citing AutoZone’s pricing actions as a contributing factor to a moderately stronger exit rate. Raymond James set a new target of $4,900, reflecting higher total comparable sales expectations influenced by foreign exchange factors and inflation trends. UBS also raised its target to $4,925, maintaining a Buy rating and anticipating strong fourth-quarter results due to investments in stores, fleet, supply chain, personnel, and technology infrastructure. Meanwhile, Mizuho adjusted its target to $4,050, following AutoZone’s fiscal third-quarter results, noting somewhat softer margin trends. These developments highlight the various factors influencing analyst expectations for AutoZone’s upcoming financial performance.
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