AutoZone Unveils $1.5B Additional Share Buyback Plan

AutoZone, Inc. (AZO), one of the largest American retailers of aftermarket automotive parts and accessories, has announced an additional stock repurchase program of $1.5 billion. The new authorization is in connection with the existing share buyback plan.

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Markedly, since the commencement of the repurchase program by the company in 1998, AutoZone’s Board has authorized share repurchases worth $27.65 billion, including the recent plan.

AutoZone CFO Jamere Jackson said, “AutoZone’s continued strong financial performance allows us to grow our business, return meaningful amounts of cash to our shareholders and maintain our investment grade credit ratings. We remain committed to our disciplined capital allocation policy to drive growth and enhance shareholder returns while maintaining adequate liquidity.” (See AutoZone stock charts on TipRanks)

Last month, AutoZone reported fiscal Q4 results. The company reported earnings of $35.72 per share, which surpassed the street’s estimate of $29.87. Net sales stood at $4.91 billion, outpacing analysts’ expectations of $4.56 billion. Results were driven by the strong performance of the retail and commercial business.

Following the fiscal Q4 results, Wells Fargo analyst Zachary Fadem lifted the stock’s price target to $1,825 (10.5% upside potential) from $1,750 and maintained a Buy rating.

Fadem commented, “All in, we see another impressive result and further evidence that DIFM investments are still resonating (+21.2% growth) despite inevitable DIY deceleration (-40bps). Looking to FY22, we see more gas in the tank, with positive sales growth still on the table and FQ1 estimates that already appear too low.”

The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 9 Buys, 3 Holds and 1 Sell. The average AutoZone price target of $1,783.75 implies 7.8% upside potential to current levels. Shares have surged 45% over the past year.

According to TipRanks’ Smart Score system, AutoZone gets a 6 out of 10, which indicates that the stock is likely to perform in line with market averages.