Wall Street Reacts Positively to AutoZone’s 1Q17 Earnings


Dec. 8 2016, Updated 3:11 p.m. ET

AutoZone’s 1Q17 earnings

AutoZone (AZO), one of the largest US auto parts retailers, released its fiscal 1Q17 earnings on December 6, 2016. The quarter covers the 12 weeks that ended November 19, 2016. Its adjusted EPS (earnings per share) was $9.36. That’s ~13.0% higher than $8.29 in the corresponding quarter of the previous year.

AZO’s earnings were very close to Wall Street analyst estimates of $9.31 per share. Now let’s take a quick look at the market reaction to AutoZone’s 1Q17 earnings.

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Market reacted positively

On the day of AutoZone’s 1Q17 earnings release, AZO stock remained largely positive and ended the session with a rise of ~0.44%. A day after the earnings release, the stock rose more to $809.47 and posted a rise of 3.8% for the session.

The company’s rising revenues and new store counts along with stable profitability could be the primary reasons for this optimism on Wall Street.

As of December 7, 2016, AutoZone has risen about 5.8% in the last three months. That’s much higher than the 1.2% rise for the S&P 500 benchmark (SPY).

For the same time period, direct peers O’Reilly Automotive (ORLY) saw a value erosion of 1.9% in that period. Advance Auto Parts (AAP), another US auto parts retail giant, rose about 8.2%.

Series overview

US automakers (XLY), including General Motors (GM) and Ford (F), reported solid November sales earlier this month. That could be driving the recent optimism in auto industry stocks. Read Decoding Mainstream Automakers’ November US Sales Data to learn more.

In this series, we’ll take a closer look at AutoZone’s rising revenue. We’ll find out what factors drove the company’s 1Q17 earnings.

We’ll also see how the company has been doing in terms of revenue and profitability. Finally, we’ll take a look at some important factors that may drive AutoZone’s valuation multiples in the coming quarters.


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