Memphis, Tennessee-based AutoZone, Inc. (AZO) operates as a retailer and distributor of automotive replacement parts and accessories. Valued at $62.1 billion by market cap, the company offers an extensive product line for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Shares of this auto parts retailer have underperformed the broader market over the past year. AZO has gained 10% ove ...

Core Viewpoint - The article discusses potential candidates for stock splits in 2026, highlighting companies with high share prices and strong financial performance that may consider splitting their stocks to enhance accessibility for retail investors [1]. Group 1: Potential Stock Split Candidates - **MercadoLibre (MELI)**: Currently trading at approximately $1,997, it is the highest-priced major growth stock without a split history. The company reported Q3 2025 revenue of $7.41 billion, a 39% year-over-year increase, with total payment volume up 41% to $71.2 billion. Its stock has appreciated 1,910% over the past decade, making it a strong candidate for a split [1]. - **AutoZone (AZO)**: Trading near $3,745, AutoZone has not split its stock in over 30 years. The company generated $6.24 billion in Q4 2025 revenue and repurchased 117,000 shares for $446.7 million. The stock has surged 390% over the past decade, and its high price may eventually lead to a reconsideration of its split policy [1]. - **Costco (COST)**: Currently trading near $988, Costco has not split its stock since 2000. The company reported Q1 FY2026 revenue of $67.31 billion, with comparable sales up 6.4%. The stock has climbed 681% over the past decade, suggesting that management may consider a split as it approaches four-digit territory [1]. - **Meta Platforms (META)**: Trading at around $645, Meta has never split its stock despite a market cap of $1.63 trillion. The company reported Q4 2025 revenue of $59.89 billion, a 23.78% year-over-year increase. With significant share buybacks and strong financial performance, Meta has the flexibility to execute a split [1]. - **Microsoft (MSFT)**: Trading at approximately $398, Microsoft has not split its stock since February 2003. The company reported Q2 FY2026 revenue of $81.27 billion, up 16.72% year-over-year. With a market cap of $2.96 trillion and a stock price increase of 759% over the past decade, Microsoft may consider a split as analyst targets suggest further upside [1]. Group 2: Characteristics of Split Candidates - The five companies mentioned share common characteristics that typically precede stock splits: elevated share prices that create accessibility barriers, strong financial performance supporting continued appreciation, and large market capitalizations providing operational flexibility [1]. - While stock splits do not alter the fundamental value of a company, they can broaden the investor base and improve trading liquidity, which may encourage management teams to consider splits as a means to maintain retail investor participation in their growth stories [1].

Group 1 - AutoZone, Inc. will release its second quarter results for the period ending February 14, 2026, on March 3, 2026, before market open [1] - A conference call to discuss the quarterly results will take place on March 3, 2026, at 10:00 a.m. (ET), accessible via webcast and phone [1] - As of November 22, 2025, AutoZone operates a total of 7,710 stores, with 6,666 in the U.S., 895 in Mexico, and 149 in Brazil [2] Group 2 - AutoZone is a leading retailer and distributor of automotive replacement parts and accessories in the Americas, offering a wide range of products for various vehicle types [3] - The company has a commercial sales program that provides prompt delivery and credit to various automotive service providers [3] - AutoZone also sells products online through its websites, including automotive diagnostic and repair software under the ALLDATA brand [3]

Group 1: AutoZone's Success - AutoZone has increased its earnings per share by 21 times since 2005, with its share price rising 42 times during the same period [6][8] - The company effectively utilized its steady cash flow for share buybacks, averaging 120% of its annual income allocated to this purpose [7][8] - AutoZone bought back 80% of its outstanding shares in 2005, leading to significant growth in earnings and share price [8] Group 2: UK Market Dynamics - The UK market is characterized by persistently low valuations due to slow adoption of global best practices in capital allocation by publicly listed companies [2][3] - Many UK companies prioritize dividends over share buybacks, which can be more effective in enhancing shareholder value, especially in a high-yield environment [3][4] - UK active fund managers have experienced nine consecutive years of outflows, making dividends a crucial lifeline for managing these outflows [4] Group 3: Potential for Change in the UK - The UK equity market is seen as being in a slow liquidation state, but such environments can present exceptional long-term investment opportunities [5] - There is a parallel with Japan, where outdated governance practices led to low valuations, but recent activist engagements have spurred share buybacks and market revival [11][12] - The UK is undergoing changes in governance and capital allocation practices, with recent activist cases leading to board resignations and shifts in management focus [13][14] Group 4: Future Investment Opportunities - A new UK-listed company has been identified as a potential investment opportunity, with plans to return substantial capital to shareholders and a transition to a capital-light model [18][21] - This company has lost 50% of its value from its peak but could trade at 3 times earnings if recovery unfolds as expected [21] - The timing of the investment opportunity is critical, with meaningful catalysts expected in March/April 2026 that could lead to a significant stock recovery [19]

Company Performance - AutoZone (AZO) closed at $3,671.61, reflecting a -1.36% change from the previous day, underperforming the S&P 500's daily loss of 0.84% [1] - Over the past month, AutoZone's shares have appreciated by 13.89%, outperforming the Retail-Wholesale sector's gain of 6.19% and the S&P 500's gain of 1.8% [1] Upcoming Earnings - Analysts expect AutoZone to report earnings of $27.59 per share, indicating a year-over-year decline of 2.47% [2] - The consensus estimate for revenue is projected at $4.3 billion, representing an 8.82% increase compared to the same quarter of the previous year [2] Fiscal Year Projections - For the entire fiscal year, earnings are projected at $149.02 per share and revenue at $20.47 billion, reflecting changes of +2.86% and +8.07% respectively from the prior year [3] Analyst Estimates - Changes in analyst estimates for AutoZone are crucial as they reflect short-term business trends, with positive revisions indicating analyst optimism regarding business and profitability [4] Zacks Rank and Valuation - AutoZone currently holds a Zacks Rank of 4 (Sell), with the Zacks Consensus EPS estimate moving 0.55% lower over the last 30 days [6] - The company is trading at a Forward P/E ratio of 24.98, which is a premium compared to the industry average Forward P/E of 17.59 [6] PEG Ratio - AutoZone has a PEG ratio of 1.77, compared to the average PEG ratio of 1.44 for Automotive - Retail and Wholesale - Parts stocks [7] Industry Overview - The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector and currently holds a Zacks Industry Rank of 176, placing it in the bottom 29% of over 250 industries [8]

Company Overview - AutoZone, Inc. (NYSE:AZO) is engaged in selling and distributing automotive replacement parts, maintenance items, and accessories for cars, SUVs, vans, and light trucks [3]. Investment Sentiment - The stock has been highlighted as a potential buying opportunity despite recent downturns, with a strong belief in the company's management and cash generation capabilities [1]. - The company has executed a significant stock buyback program, reducing its float by 50% over the past few years, which is viewed positively by analysts [3]. Analyst Recommendations - Analysts express confidence in AutoZone's stock, suggesting that the recent price drop may present a favorable entry point for investors [1][3]. - The stock has been consistently recommended for over a decade, indicating a long-term positive outlook from analysts [3].

Group 1 - AutoZone Inc (NYSE:AZO) is viewed positively by hedge funds, with an Overweight rating maintained by JPMorgan, despite a price target reduction from $4,850 to $4,100, indicating an upside potential of almost 11% [1][2] - The company reported weaker-than-expected sales figures for the fourth quarter, but management's focus on accelerating store growth is expected to continue longer than previously anticipated, despite some weather-related challenges [2] - The stock has received Buy ratings from 17 out of 20 analysts, with a consensus upside of over 16% based on a median 1-year target price of $4,282 [3] Group 2 - AutoZone operates retail stores and a distribution network for automotive replacement parts and related products, serving both DIY customers and commercial repair centers [4]

Group 1 - AutoZone, Inc. (NYSE:AZO) has been recognized for its significant stock buyback program, reducing its float by 50% over the past few years, indicating strong management confidence in the company's value [1] - Despite recent stock price fluctuations due to inconsistent quarterly results, the company is expected to perform better in the next quarter, maintaining a reputation for consistent performance and effective pivots [2] - The stock has been a long-term recommendation, with the belief that current market conditions present a good opportunity for investors to re-enter [1][2] Group 2 - While AutoZone shows potential as an investment, there are other AI stocks that may offer greater upside potential and lower downside risk, suggesting a competitive investment landscape [3]

Company Overview - AutoZone, Inc. (AZO) has a market capitalization of $60.8 billion and is a leading retailer and distributor of automotive replacement parts and accessories in the United States, Mexico, and Brazil, offering a wide range of products and services for various vehicles [1] Earnings Expectations - Analysts anticipate that AutoZone will report a profit of $27.19 per share for fiscal Q2 2026, representing a decline of 3.9% from $28.29 per share in the same quarter last year [2] - For fiscal 2026, the expected EPS is $148.55, which is an increase of 2.5% from $144.87 in fiscal 2025, with further growth projected to 18.7% year-over-year to $176.25 in fiscal 2027 [3] Stock Performance - Over the past 52 weeks, AutoZone's shares have increased by 11.3%, which is below the S&P 500 Index's gain of 13.7%, but has outperformed the State Street Consumer Discretionary Select Sector SPDR ETF's return of 5.2% [4] Recent Financial Results - AutoZone's shares fell by 7.2% on December 9 after reporting Q1 2026 EPS of $31.04 and revenue of $4.63 billion, both of which were below forecasts. Despite an 8.2% increase in net sales and a 4.7% gain in same-store sales, operating profit declined by 6.8% to $784.2 million, and net income decreased to $530.8 million. A significant concern was a 203-basis-point drop in gross margin to 51%, primarily due to a 212-basis-point non-cash LIFO impact and increased operating expenses related to growth investments [5] Analyst Ratings - The consensus among analysts for AutoZone's stock is bullish, with a "Strong Buy" rating overall. Out of 29 analysts, 21 recommend "Strong Buy," 2 suggest "Moderate Buy," and 6 indicate "Hold." The average price target for AutoZone is $4,265.35, indicating a potential upside of 16.2% from current levels [6]

Group 1 - AutoZone, Inc. (NYSE:AZO) has experienced a decline in its price-to-earnings ratio to around 23, despite maintaining good earnings and growth [1] - The stock's recent performance was impacted by an inconsistent earnings report, leading to a significant sell-off, but the company is expected to recover in the next quarter [1] - AutoZone has reduced its share count by 44.9% since the end of 2015 and approximately 89% since summer 1998, contributing to its status as a long-term outperformer [2] Group 2 - The current high interest rates make financing for new cars expensive, prompting consumers to seek replacement parts for their existing vehicles [2] - AutoZone's stock has pulled back 22% from its recent highs, presenting a potential buying opportunity [2]