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On Wednesday, Guggenheim updated its outlook on AutoZone (NYSE: NYSE:AZO) shares, raising the price target to $4,100 from the previous $3,850 while maintaining a Buy rating on the stock. Currently trading at $3,695, AutoZone’s analyst targets range from $2,830 to $4,850, reflecting diverse market opinions. According to InvestingPro data, the stock appears overvalued based on its Fair Value analysis. This adjustment comes in response to AutoZone’s third-quarter 2025 performance, which the firm believes supports the case for continued sequential improvement.
The Guggenheim analyst highlighted AutoZone’s acceleration in both domestic retail and commercial sales as key indicators of the company’s positive trajectory. The company maintains a robust gross profit margin of 53% and has achieved revenue growth of 4.7% over the last twelve months. Despite some margin pressures such as product mix, shrinkage, distribution center costs, strategic investments, and higher self-insurance expenses leading to a slight EBIT(DA) miss, the analyst anticipates that these issues will diminish by the fourth quarter of 2025. InvestingPro analysis reveals 8 additional key insights about AutoZone’s financial health and market position. This, in turn, is expected to clear the way for mid-single-digit EBIT growth, aligning with Guggenheim’s projections for 2026.
AutoZone’s strategic investments, notably the expansion of hub and mega hub locations, are projected to continue driving domestic commercial sales growth. With a moderate debt level and an overall "GOOD" financial health rating from InvestingPro, the company appears well-positioned to fund its expansion plans. Guggenheim forecasts 28 mega hub openings in 2026, up from 20 in 2025. These expansions, along with a return to more favorable ticket-related dynamics, are believed to enhance AutoZone’s long-term growth potential, building on its impressive 9% revenue CAGR over the past five years.
The raised 12-month price target to $4,100 reflects Guggenheim’s confidence in AutoZone’s strategic initiatives and their expected contribution to the company’s profitability and growth. The firm’s reiteration of the Buy rating suggests that they see the stock as a strong investment opportunity based on the company’s recent performance and future prospects.
In other recent news, AutoZone has seen several updates from analysts regarding its stock targets and performance. Raymond (NSE:RYMD) James increased its price target for AutoZone to $4,200, maintaining a Strong Buy rating, citing the company’s positive sales momentum and strategic investments. Wells Fargo (NYSE:WFC) also reiterated its Overweight rating with a $4,200 target, highlighting AutoZone’s strong domestic sales growth in both the do-it-yourself (DIY) and do-it-for-me (DIFM) segments. DA Davidson raised its target significantly to $4,850, emphasizing the company’s market share gains and potential for long-term growth despite current margin pressures.
Jefferies adjusted its price target to $4,255, acknowledging AutoZone’s challenges with foreign exchange rates and accounting effects but maintaining confidence in its market share expansion in the DIFM sector. BMO Capital increased its target to $4,100, noting the company’s continued investments and potential to capture more market share in a fragmented industry. Despite some challenges, AutoZone’s ongoing strategies, such as expanding its megahub network and improving parts availability, are seen as key drivers for future growth. Each firm expressed a belief in AutoZone’s ability to navigate current headwinds and sustain its growth trajectory. These developments reflect a generally positive outlook from analysts on AutoZone’s future performance.
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