Analyst Robert Ohmes from Bank of America Securities reiterated a Hold rating on AutoZone (AZO – Research Report) and increased the price target to $3,700.00 from $3,600.00.
Robert Ohmes has given his Hold rating due to a combination of factors impacting AutoZone’s performance. The company’s recent earnings report showed a mixed picture, with earnings per share falling short of expectations primarily due to unfavorable currency fluctuations, despite domestic comparable sales exceeding forecasts. This indicates some underlying challenges, particularly in international markets, that could affect future performance.
Additionally, while AutoZone’s gross margin remained stable, there are anticipated pressures in the upcoming quarter due to the absence of a previous inventory benefit. However, the company is expected to mitigate these pressures through strategic pricing and sourcing adjustments. Furthermore, AutoZone’s ongoing investments in new distribution centers and mega hubs are likely to enhance inventory availability and support market share growth. Despite these positive developments, the overall consumer environment remains challenging, justifying the Hold rating as the company navigates these mixed conditions.
AZO’s price has also changed slightly for the past six months – from $3166.710 to $3473.660, which is a 9.69% increase.