UBS Reiterates Buy on AutoZone (AZO)
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UBS reiterated a Buy rating and $825.00 price target on AutoZone (NYSE: AZO). The market is likely to interpret any potential sluggishness to be a result of a zero-sum game either because AAP is donating less share or because AMZN is making its presence known.
Analyst Michael Lasser commented, "While we think AZO’s comp accelerated a touch from last quarter, the real improvement should come in the next few quarters. AutoZone’s F1Q coincided with a period of mixed reads in the industry. Plus, it faced a challenging 3.5% comparison. Further, YoY fuel price declines have moderated in the last few months. These factors probably mean that the progress from its inventory initiatives, labor investments, & new store prototype implementation have only been modest. Thus, we believe a 1.8% comp is a realistic expectation for AZO in 1Q (in line with the consensus). This helps drive our 1Q'17 $9.35 EPS estimate (also in line with the consensus). While AZO’s shares have moved up in recent weeks, we still think they offer a lot of long-term potential."
Shares of AutoZone closed at $790.24 yesterday.
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