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What Analysts Recommend for AutoZone

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Analysts’ consensus on AutoZone

According to analysts’ latest consensus compiled by Reuters, 60% of analysts covering AutoZone (AZO) gave the stock “buy” recommendations, while the remaining 40% have recommended a “hold.” Notably, none of the total 25 analysts gave a “sell” recommendation.

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Target and return potential

The consensus suggests that AutoZone’s stock has the potential to reach $857 in the next 12 months. This target represents an 8.5% upside potential from the market price of $790.24 as of November 29, 2016.

The company’s rising sales and stronger profitability could be the primary reasons why most analysts are maintaining a positive view on its stock. Also, AutoZone’s business model is such that it doesn’t require huge investments to drive growth currently.

Investors should pay attention to analysts’ recommendations, as they impact a company’s stock price movement. If a popular analyst changes his or her view, a significant short-term movement in the stock could follow.

Peer recommendations

In comparison, analysts’ consensus “buy” recommendations for other auto parts sellers and automakers (XLY) with expected 12-month stock price movements are as follows:

  • About 56% of analysts gave Advance Auto Parts (AAP) a “buy” with just 3% upside potential.
  • About 49% of analysts gave O’Reilly Automotive (ORLY) a “buy” with about 9% upside potential.
  • 32% of analysts gave Ford (F) a “buy” with about 11% upside potential.
  • 45% of analysts gave Fiat Chrysler Automobiles (FCAU) a “buy” with ~32% upside potential.

Continue to the next part where we’ll look at AutoZone’s valuation multiples ahead of its upcoming quarterly results.

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