AutoZone Shares Slip As Analyst Downgrades

NEW YORK (AP) — Shares of AutoZone Inc. declined Thursday after an analyst downgraded the auto parts retailer, saying the do-it-yourself car repair business is showing signs of slowing.

The stock fell $7.16, or 4.8 percent, to $141.33 in morning trading.

Wedbush Morgan analyst Camilo Lyon cut AutoZone to "Underperform" from "Neutral" in a note to investors on Thursday. Lyon said 84 percent of AutoZone's business comes from customers looking to repair their own vehicles, a business segment that is starting to slow down.

The analyst also cut AutoZone's price target to $142 from $170, implying a decline of 4.4 percent from the stock's Wednesday close of $148.49.

Lyon said Wednesday's second-quarter results at rival Advance Auto Parts Inc. could prove "a harbinger of what AutoZone could produce." Advance Auto Parts posted just a 0.7 percent year-over-year increase in its do-it-yourself business. That signals AutoZone is likely to report "flattish" year-over-year results among do-it-yourselfers, the analyst said.

"We continue to view AutoZone's management team as solid operators and formidable competitors ... however we believe the shares have limited upside potential given their exposure to the DIY segment," Lyon wrote.

The Memphis, Tenn.-based company is scheduled to report fiscal fourth-quarter results on Sept. 21.

Shares of AutoZone have traded between $84.66 and $169.98 in the last 52 weeks. The stock is up 6.5 percent so far this year.