AutoZone (AZO) Stock Forecast & Price Target

AutoZone's impressive fundamentals support a positive outlook, highlighted by a 5.9% increase in transaction count and strong same-store sales growth, particularly within the domestic commercial market, which saw an over 12% increase. The company's ability to drive higher average ticket sales, rising by 6.1% due to same-SKU inflation, suggests resilience amid inflationary pressures, while its international segment also demonstrated strength with same-store sales up 3.7% in constant currency. Overall, the continued growth in commercial sales, coupled with stable DIY demand, underlines AutoZone's capacity to capture market share and reinforce its dominant position in the automotive retail sector.

AutoZone's financial outlook is negatively impacted by a downward revision in its FY27 EPS forecast to $185.91, reflecting higher selling, general, and administrative expenses primarily associated with new store growth, only partially offset by an expected same-store sales growth of 5.0%. Additionally, the company anticipates a decrease in its EBIT margin to 18.0%, largely due to significant LIFO charges and expenses tied to store expansion. Traffic challenges, highlighted by a 3.4% decline in DIY customer visits and the impact of unfavorable weather, further contribute to the weakened financial performance and outlook.