AutoZone's Growth Story Intact, Analysts Highlight Commercial Strength and Expansion Plans

Core Viewpoint - Analysts have raised price forecasts for AutoZone, Inc. following the second-quarter results, despite the company missing earnings and sales expectations [1][2]. Group 1: Financial Performance - AutoZone reported second-quarter GAAP earnings per share of $28.29, which was below the expected$29.39, and sales of $3.952 billion, a 2.4$3.981 billion [1]. - The company is experiencing strong commercial performance and resilient gross margins, although the FY25 EPS estimate has been lowered to $153.10 from$154.85 [2]. Group 2: Growth Prospects - International growth remains a positive aspect, with plans to open approximately 100 new stores, despite facing near-term foreign exchange challenges [2]. - The Mega-Hub expansion is crucial, with plans for 300 locations aimed at enhancing both domestic retail (DIY) and DIFM availability [2]. Group 3: Sales Trends - DIFM sales are increasing due to improved inventory placement and faster delivery, while DIY traffic is under pressure but is expected to rebound as macro conditions improve [3]. - The results indicate continued sequential improvement, with stronger DIY and DIFM comparisons anticipated [4]. Group 4: Analyst Ratings and Price Forecasts - Raymond James analyst Bobby Griffin maintained a Strong Buy rating and raised the price target from $3,850 to$4,000 [1]. - Other analysts have also revised their price forecasts upward, with notable increases from DA Davidson, Evercore ISI Group, JP Morgan, BMO Capital, Morgan Stanley, and Mizuho [8]. Group 5: Market Reaction - Following the news, AutoZone shares increased by 2.36%, reaching $3,555.56 [6].