Update (9:40 a.m.): Updated with Wednesday market open information.
UBS increased its target price on AutoZone to $555, increased its estimates and set a "neutral" rating as it noted the company has capitalized on strong industry trends and made inventory investments. J.P. Morgan increased its target price to $590, increased its estimates and set an "overweight" rating, as the company is seeing higher sales and a lower tax rate.
The stock was rising 0.74% to $542.54 at 9:40 a.m. on Wednesday.
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Separately, TheStreet Ratings team rates AUTOZONE INC as a "buy" with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AUTOZONE INC (AZO) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, solid stock price performance and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.5%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for AUTOZONE INC is rather high; currently it is at 54.52%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.41% is above that of the industry average.
- Net operating cash flow has increased to $357.34 million or 12.28% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -7.83%.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.90% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AZO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- AUTOZONE INC has improved earnings per share by 16.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AUTOZONE INC increased its bottom line by earning $27.88 versus $23.57 in the prior year. This year, the market expects an improvement in earnings ($31.39 versus $27.88).
- You can view the full analysis from the report here: AZO Ratings Report