Bank of America just raised its EUR/USD forecast
On Friday, JPMorgan increased its price target on AutoZone (NYSE:AZO) shares to $4,350 from the previous $3,830, while maintaining an Overweight rating on the stock. The adjustment comes ahead of the company’s third-quarter earnings report scheduled for Tuesday, May 28, before market open. Currently trading at $3,826.46 and near its 52-week high of $3,916.81, InvestingPro analysis suggests the stock is trading above its Fair Value, with a P/E ratio of 25.82.
According to JPMorgan analysts, AutoZone is expected to benefit from self-help initiatives and market share gains. Despite the consensus being high on margins, JPMorgan anticipates the profit and loss statement to show positive signs, suggesting that any potential share price weakness following the earnings report would present a buying opportunity for investors. With a market capitalization of $64 billion and an impressive gross margin of 53.13%, InvestingPro data reveals the company maintains a strong financial health score, with 10+ additional exclusive insights available to subscribers.
The firm has revised its third-quarter U.S. comparable sales forecast for AutoZone to 2.8%, an increase from the Street’s expectation of 2.5%. This forecast is underpinned by improvements in AutoZone’s domestic DIFM (Do It For Me) business, favorable seasonal factors, early benefits from competitor Advance Auto Parts (NYSE:AAP)’ store closures, and modest inflationary assistance.
JPMorgan highlighted AutoZone’s technological and process enhancements, such as inventory allocation and delivery routing systems, which have strengthened the company’s fundamentals. Additionally, the pace of Megahub openings is set to accelerate, which is expected to further bolster performance.
While JPMorgan’s gross margin and operating margin estimates of 53.2% and 19.9%, respectively, are slightly below the Street’s projections, the firm notes that AutoZone is likely only one or two quarters away from growth, considering factors like the best winter weather in five years, tariff-driven inflation, and the challenges facing smaller competitors. The company has demonstrated solid performance with a 4.72% revenue growth in the last twelve months. Get deeper insights into AutoZone’s financial health and growth potential with InvestingPro’s comprehensive research report, part of our coverage of 1,400+ top US stocks.
The recent debt offering by AutoZone is seen as a positive signal for future EBITDA growth, especially as the company moves past significant foreign exchange headwinds expected to annualize in the fourth quarter ending August 2025. With these factors in mind, JPMorgan reaffirms its Overweight rating on AutoZone and views the stock as a top pick within the sector that is considered relatively safe from tariff impacts.
In other recent news, AutoZone is set to release its fiscal third-quarter earnings on May 27, 2025, with analysts providing varied expectations. BofA Securities has upgraded AutoZone’s stock rating to Buy, raising the price target to $4,800, with an earnings per share (EPS) forecast of $38.15, surpassing the consensus estimate of $36.80. Meanwhile, TD Cowen has also maintained a Buy rating, increasing the price target to $4,300, though it adjusted the EPS estimate downward to $35.75, below the consensus. Evercore ISI added AutoZone to its Tactical Outperform List, anticipating an EPS of $38.16, indicating a positive outlook based on strategic expansions and inventory enhancements. Oppenheimer has upgraded the stock to Outperform with a price target of $4,600, citing AutoZone’s resilience amid economic challenges. In corporate governance, AutoZone has expanded its board of directors, appointing Claire Rauh McDonough, Rivian (NASDAQ:RIVN)’s CFO, bringing her extensive experience to the company. This appointment underscores AutoZone’s commitment to leadership diversity in the evolving automotive industry. These developments reflect the company’s strategic positioning and potential for growth in the current market environment.
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