AutoZone (AZO) Stock Forecast & Price Target

AutoZone's positive outlook is bolstered by a 5.9% increase in transaction count on a same-store basis, indicating strong share gains and new business opportunities. The company's Domestic Commercial/DIFM segment exhibited exceptional performance, with same-store sales growth accelerating to over 12%, and commercial sales rising by 14.5% during the latest quarter. Additionally, the firm's international business contributed to overall sales, with same-store sales growing 3.7% in constant currency, demonstrating a robust expansion strategy beyond the U.S. market.

AutoZone's financial outlook is hindered by a downward revision in its fiscal year 2027 EPS forecast, now projected at $185.91, reflecting an increase of only 25% compared to previous estimates attributed to heightened selling, general, and administrative (SG&A) expenses and LIFO charges totaling approximately $360 million. The company's EBIT margin forecast is also downgraded to 18.0% from 19.5%, largely due to the costs associated with new store growth that undermine profitability. Moreover, a decline in traffic, particularly a 3.4% drop in DIY sales, compounded by unfavorable weather conditions and weak comparative results from the previous year, suggests ongoing challenges in maintaining consumer engagement and revenue growth.