AutoZone: Forget the Pullback, This Stock Is Still Climbing

Core Insights - AutoZone's FQ2 2025 earnings results highlight the company's quality and potential, prompting analysts to raise price targets and boost market sentiment [1][3] - Despite weak Q2 results relative to consensus forecasts, the market focused on core numbers, showing a 2.4% top-line growth and a 1.9% increase in domestic comp store growth [4][5] - Institutional activity has been a significant tailwind for AutoZone shares, with institutions owning over 93% of the stock and continuing to buy [8] Analyst Revisions - Following the Q2 release, 16 out of 24 analysts issued revisions, including 14 price target increases and one downgrade to Hold [2] - The consensus price target rose by 7% overnight and 20% over the past 12 months, indicating strong growth potential [3] Financial Performance - AutoZone reported a flat gross margin and a 4.9% decline in GAAP operating income, despite top-line growth [5][7] - GAAP earnings fell short of consensus by nearly $0.70, but the$28.29 EPS remains strong enough to support the company's financial health [7] Investment and Growth Strategy - Increased investments in expanding store count and technology are expected to sustain growth and widen margins in the future [6] - Share repurchases have reduced the share count by an average of 3.2% in Q2, with buybacks expected to continue aggressively [7] Market Outlook - The price action for AutoZone shares is bullish, trading at a new all-time high with indicators suggesting a continued uptrend [9] - The market may consolidate at current levels before potentially gaining another $500 to reach$4,000 [10]