Update shared on18 Oct 2025
Fair value Increased 0.30%AutoZone’s analyst price target saw a modest increase, with new estimates rising by $14 to $4,570. Analysts highlight persistent industry share gains and resilient sales momentum, despite ongoing margin pressures.
Analyst Commentary
Analysts recently issued a range of new price targets and commentary on AutoZone, reflecting both confidence in the company’s continued execution and awareness of ongoing industry headwinds. Their perspectives highlight the factors influencing current valuations and expectations moving into the next fiscal year.
Bullish Takeaways- Many bullish analysts see strong ongoing market share gains, especially in the commercial and do-it-for-me (DIFM) segments. These are supported by robust same-store sales momentum.
- Despite some margin pressure, there is broad confidence in management's growth strategy, including an accelerated pace of new store openings as well as investments in operational efficiency and digital initiatives.
- AutoZone’s ability to pass through price increases with limited impact on demand is expected to support both sales and earnings growth, even in the face of inflationary pressures.
- Some major firms highlight an improving gross margin environment. They suggest that temporary impacts such as last-in, first-out (LIFO) accounting will reverse, which could set up a return to double-digit earnings per share growth in the coming year.
- Bearish analysts caution that recent quarters saw margin and earnings misses, largely attributed to non-cash LIFO charges and elevated SG&A expenses associated with rapid expansion.
- Near-term profitability is likely to remain pressured as store build-outs and supply chain investments ramp up. Management is working to balance growth with operating leverage.
- Some analysts warn that prolonged SG&A deleverage could weigh on overall valuation multiples if it is not offset by sustained sales acceleration or successful cost management.
What's in the News
- On October 9, 2025, AutoZone announced an additional $1,500 million increase to its equity buyback plan, raising the total authorization to $33,750 million (Key Developments).
- Between May 11, 2025 and August 31, 2025, the company repurchased 117,000 shares for $446.2 million. This completed the repurchase of 44,806,031 shares valued at over $31.6 billion under the ongoing buyback initiative (Key Developments).
Valuation Changes
- Fair Value Estimate has risen slightly, from $4,556 to $4,570.
- Discount Rate decreased marginally, moving from 8.64% to 8.58%.
- Revenue Growth projections have increased modestly, from 7.57% to 7.62%.
- Net Profit Margin expectations declined slightly, from 13.53% to 13.50%.
- Future P/E Ratio has increased, rising from 27.48x to 29.37x.
Disclaimer
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