Nomura Securities Maintains a 'Buy' on AutoZone (AZO); ESL Hangover Worn Off
AZO Hot Sheet
Rating Summary:7 Buy, 5 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 20 | Down: 11 | New: 38
Nomura Securities maintains a 'Buy' on AutoZone (NYSE: AZO) price target of $395.00.
Analyst, Aram Rubinson, said, "ESL Investments (controlled by Eddie Lampert) and its affiliates began selling AZO shares in C09, after reaching an ownership agreement with AZO in June 08. The agreement allowed AZO to continue buying back stock without, by default, turning ESL into a majority stakeholder. ESL’s stock sales seemed to take on a different purpose during C11. By October, ownership was down to ~30%, but still ahead of the 25% threshold at which the 6/2008 agreement would no longer be in effect. By year-end, that threshold had been breached. We do not dismiss the value of insider activity, but we do not view this activity as a poor reflection on AZO’s operations or prospects. In fact, AZO is executing as well as ever, and we believe that ESL’s activity reflects other considerations like management of the diminishing value of its Sears (Nasdaq: SHLD) investment. As ESL’s stake whittles down, we would expect AZO shares to perform as well (or better) than its operations."
For an analyst ratings summary and ratings history on AutoZone click here. For more ratings news on AutoZone click here.
Shares of AutoZone closed at $347.01 yesterday, with a 52 week range of $246.26-$350.55.
Discover Wall Street's best ratings calls with the pros - Ratings Insider Elite. Free Trial!
Analyst, Aram Rubinson, said, "ESL Investments (controlled by Eddie Lampert) and its affiliates began selling AZO shares in C09, after reaching an ownership agreement with AZO in June 08. The agreement allowed AZO to continue buying back stock without, by default, turning ESL into a majority stakeholder. ESL’s stock sales seemed to take on a different purpose during C11. By October, ownership was down to ~30%, but still ahead of the 25% threshold at which the 6/2008 agreement would no longer be in effect. By year-end, that threshold had been breached. We do not dismiss the value of insider activity, but we do not view this activity as a poor reflection on AZO’s operations or prospects. In fact, AZO is executing as well as ever, and we believe that ESL’s activity reflects other considerations like management of the diminishing value of its Sears (Nasdaq: SHLD) investment. As ESL’s stake whittles down, we would expect AZO shares to perform as well (or better) than its operations."
For an analyst ratings summary and ratings history on AutoZone click here. For more ratings news on AutoZone click here.
Shares of AutoZone closed at $347.01 yesterday, with a 52 week range of $246.26-$350.55.
Discover Wall Street's best ratings calls with the pros - Ratings Insider Elite. Free Trial!
You May Also Be Interested In
- Nomura Securities Reiterates a 'Buy' on AutoZone (AZO); Tweaking Estimates After Q3 Results
- Deutsche Bank Cuts Price Target and EPS Estimates on J. C. Penney (JCP); There's Only Two Ways This Can Go
- UBS Maintains a 'Buy' on Express Inc. (EXPR); A Misstep, But Still A Consistent Performer
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
Edward Lampert, RBS Partners, ESL Investments, NomuraSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
