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On Wednesday, BofA Securities analyst Robert Ohmes upgraded AutoZone (NYSE:AZO) stock, listed on the New York Stock Exchange (NYSE: AZO), from Neutral to Buy, increasing the price target to $4,800 from the previous $3,900. Trading near $3,880, the stock has gained 21% year-to-date and sits close to its 52-week high of $3,917. According to InvestingPro analysis, AutoZone appears slightly overvalued at current levels. This adjustment comes ahead of the company’s fiscal third-quarter earnings report, scheduled to be released on Tuesday, May 27, 2025.
Ohmes forecasts AutoZone’s earnings per share (EPS) for the fiscal third quarter (F3Q25) at $38.15, which surpasses the consensus estimate of $36.80. He also projects a domestic comparable sales growth of 2.0%, slightly under the consensus of 2.4%. The optimism is partly based on observed sales trends and consumer spending data. The company, currently valued at $64.8 billion, maintains strong fundamentals with a 53% gross profit margin and has demonstrated steady revenue growth of 4.7% over the last twelve months.
The upgrade reflects expected top-line strength, as evidenced by the sequential acceleration in Bloomberg Second Measure data, which showed an increase from 1.88% in the fiscal second quarter (F2Q25) to 5.83% in F3Q25. Additionally, weekly sales observed in March indicated high single-digit growth, likely bolstered by favorable tax refunds.
Further supporting the positive outlook, BofA aggregated credit and debit card data as of May 9, 2025, suggest a resilient auto aftermarket spending pattern. This data aligns with broader economic analyses, which may provide context for AutoZone’s anticipated performance.
In his comments, Ohmes mentioned the relevance of BofA’s aggregated card data and referenced the BofA on USA report for details on limitations, disclosures, and methodology related to the data. AutoZone, a leading retailer and distributor of automotive replacement parts and accessories, is poised to reveal its F3Q25 results, which will offer a clearer picture of the company’s financial health and market position.
In other recent news, AutoZone has been the focus of several analyst updates and company developments. AutoZone’s fiscal third-quarter earnings are anticipated to exceed market expectations, with Evercore analysts predicting earnings per share (EPS) of $38.16, surpassing the consensus estimate of $37.01. This optimism is supported by a projected 2.7% increase in domestic comparable sales. Meanwhile, TD Cowen has raised AutoZone’s stock price target to $4,300, expressing confidence in the company’s market share growth and professional business segment. Oppenheimer has also upgraded AutoZone to an "Outperform" rating, setting a price target of $4,600, citing the company’s resilience amid economic challenges.
Additionally, AutoZone has expanded its Board of Directors with the appointment of Claire Rauh McDonough, Rivian (NASDAQ:RIVN)’s Chief Financial Officer, enhancing the board’s expertise. In response to new tariffs announced by former President Donald Trump, UBS has highlighted AutoZone’s above-average pricing power as a potential advantage in the retail sector. These recent developments suggest that AutoZone is strategically positioned to navigate current economic conditions and capitalize on growth opportunities.
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