Shares of AutoZone Inc (NYSE:AZO) tanked in early trading on Wednesday after the company reported its fiscal third-quarter results.
Here are the key analyst insights:
- Guggenheim Securities analyst Steven Forbes reiterated a Buy rating, while slashing the price target from $4,400 to $4,000.
- DA Davidson analyst Michael Baker maintained a Buy rating and price target of $4,300.
Check out other analyst stock ratings.
Guggenheim Securities: AutoZone reported mixed results for the fiscal third quarter, with a modest revenue miss, "yet solid bottom-line beat," with EBITDA and earnings per share topping expectations by around 4.2% and 8.8%, respectively, Forbes said in a note.
While adverse weather conditions during the last two weeks of the quarter likely reduced domestic comps from 4.8% to 4.1%, the year-over-year comps in these weeks were the easiest, "implying that internal plans for the quarter might have been close to ~5.0%," he added.
There is potential for DIFM (do it for me) transaction trends to accelerate from the current levels, considering that management reiterated its outlook for new hub openings and slightly raised their projection for new store growth, the analyst stated.
With the forward earnings outlook relatively unchanged, the stock's year-to-date underperformance offers "a rare buying opportunity," he further wrote.
DA Davidson: AutoZone's domestic comps improved to 4.1%, from the previous quarter's 3.4%, although the figure missed consensus of 4.7%, Baker said. Investors may have been anticipating upside, given competitors’ results related to the tax refund benefit, he added.
"But remember that AZO's quarter began on Feb. 15, meaning some of that benefit was captured in their 2Q26 results," the analyst wrote. The two-year domestic stacked comp came in at 9.1%, much better than the previous quarter's 5.3% and representing the best rate since the second quarter of 2023, he stated.
This was AutoZone's "best quarter in some time," but the results missed elevated expectations, Baker further noted.
Price Action
Shares of AutoZone had declined by 2.79% to $3,016.51 at the time of publication on Wednesday.
Image: Shutterstock
Login to comment