Bruce Bennett
Evercore ISI initiated a positive Tactical Trading Call on AutoZone (NYSE:AZO) on Wednesday ahead of the retailer’s earnings report for May 23.
Analyst Greg Melich and team see near term upside potential on AutoZone (AZO) of around $2,900, which works out to 18X to 19x the 2024 EPS estimate on the stock.
“We believe that AZO is well positioned to exceed investor expectations for same store sales and earnings for F3Q, with a constructive tone heading into F4Q and beyond related to industry drivers, and rational industry competitors. We are raising our AZO comp to 4.3% (Street at 4%) reflecting a likely four year comp increase of 37% that is reasonably close to ORLY’s 44%, and well ahead of both NAPA U.S. and Advance Auto on our estimates. “
Evercore ISI’s FQ3 EPS on AZO of $32.50 compares to the Street consensus at $31.16 and the FY23 EPS of $131.80 is also above the Street mark of $128.90.
Evercore’s bullish stance on AutoZone (AZO) is based in part to consumer spend intention data that came in strongly positive for the company. Web traffic data is also noted to have been favorable for AutoZone.
In general, Evercore ISI likes the auto parts sector’s retail positioning on the view that stubbornly high new and used vehicle prices are likely to cause consumers to focus on fixing the vehicle they do have and deferring a much larger ticket purchase.
Shares of AutoZone (AZO) moved up 0.67% in early action on Wednesday.

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