Fed Governor Adriana Kugler to resign
On Monday, Evercore ISI made adjustments to its Tactical Outperform (TAP) and Tactical Underperform Lists, adding AutoZone (NYSE:AZO) to the former and Lowe’s Companies (NYSE:LOW) to the latter. These changes come ahead of their respective quarterly earnings announcements. AutoZone, currently valued at $63.3 billion, has shown robust performance with a 4.72% revenue growth over the last twelve months and maintains a strong profit score according to InvestingPro data.
AutoZone is set to release its fiscal third-quarter earnings on May 27, 2025. Evercore analysts are optimistic, anticipating the company to outperform the market’s expectations with a domestic comparable sales increase of 2.7% versus the consensus of 2.4%, and earnings per share (EPS) of $38.16 compared to the Street’s $37.01 estimate. The firm credits AutoZone’s strategic focus on expanding mega hub stores and enhancing inventory, which has led to improved direct import sales. Trading near its 52-week high of $3,916.81 with a P/E ratio of 24.58, InvestingPro analysis suggests the stock is currently overvalued relative to its Fair Value. Despite the uncertainty surrounding tariffs, Evercore suggests that the company’s recent initiatives are likely to result in a high single to low double-digit rise in AutoZone’s stock price, with the upcoming earnings report being a significant catalyst. Evercore has set a new base case price target for AutoZone at $3,950, based on 23 times their calendar year 2026 EPS forecast.Want deeper insights? InvestingPro subscribers have access to 10 additional ProTips and a comprehensive research report that provides detailed analysis of AutoZone’s financial health, valuation metrics, and growth prospects.
Home Depot (NYSE:HD) is also on Evercore’s radar, with the firm expecting the company to maintain its 2025 guidance of a 2% EPS decline, or approximately $14.95, aligning closely with Evercore’s slightly lower $15 estimate and the Street’s $14.98. Despite a 2% decline year-to-date, Evercore believes that Home Depot’s confirmation of improving comparable sales throughout the year could propel the stock back above $400. The firm highlights Home Depot’s investments in technology and focus on the professional segment as strengths that position the retailer well for a potential market turnaround in the home improvement sector.
On the other hand, Lowe’s is anticipated to report its first-quarter earnings on May 21, 2025, and Evercore has initiated a negative TAP stance on the stock. The analysts have lowered their comparable sales estimate for Lowe’s to -2.5% for the first quarter and to flat for the full year. They also expect Lowe’s to revise its 2025 EPS guidance to around their estimate of $12.10, which is below the company’s projected range. The anticipated reduction in the buyback estimate to $400 million due to the $1.3 billion cost of acquiring Artisan Design Group is also a concern for Evercore. The firm suggests that Lowe’s stock could fall back toward $220 or underperform compared to Home Depot, especially if earnings this week reflect these lowered expectations.
In other recent news, AutoZone has reported several key developments. Goldman Sachs upgraded AutoZone’s stock rating from ’Sell’ to ’Neutral’ and raised the price target to $3,811, reflecting a more favorable outlook on the company’s defensive business model. Similarly, Oppenheimer upgraded AutoZone to ’Outperform’ with a price target of $4,600, citing strong market positioning and potential tariff-driven sales benefits. Additionally, UBS highlighted AutoZone’s above-average pricing power, which could provide an advantage amid new tariffs impacting the retail sector.
AutoZone also announced a change in its corporate governance policy, lowering the threshold for shareholders to call a special meeting to 25% of voting stock, enhancing shareholder rights. In another development, Claire Rauh McDonough, CFO of Rivian (NASDAQ:RIVN), was appointed to AutoZone’s Board of Directors, bringing extensive experience from her roles in investment banking and the electric vehicle industry. These recent developments underscore AutoZone’s strategic moves to strengthen its market position and governance framework.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.