TD Cowen analyst Max Rakhlenko maintained a Buy rating on AutoZone today and set a price target of $4,900.00.
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Max Rakhlenko’s rating is based on several key factors that highlight AutoZone’s potential for growth. The company is expected to see strong domestic comparable sales growth, particularly in the Do-It-For-Me (DIFM) segment, which is projected to increase by nearly 10%. This growth is driven by same-SKU inflation and an increase in market share, despite a slight reduction in EBIT margin due to higher LIFO expenses and ongoing SG&A investments.
Additionally, AutoZone’s performance in the aftermarket sector has been strong, with its valuation increasing significantly year-to-date. The company is benefiting from efficient megahub utilization and faster delivery, with plans to expand megahub openings over the next few years. Despite some challenges, such as increased deferrals, the overall outlook remains positive, with expectations for continued price increases and low elasticity. These factors contribute to a constructive view on AutoZone’s execution and growth prospects, supporting the Buy rating.
Rakhlenko covers the Consumer Cyclical sector, focusing on stocks such as Home Depot, O’Reilly Auto, and Planet Fitness. According to TipRanks, Rakhlenko has an average return of 13.0% and a 70.86% success rate on recommended stocks.
In another report released yesterday, Wolfe Research also initiated coverage with a Buy rating on the stock with a $4,741.00 price target.