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How AutoZone’s PE Multiple Stacks Up against Peers’

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Forward PE multiples

On January 23, AutoZone’s (AZO) 12-month forward PE ratio was 13.8x. Meanwhile, Advance Auto Parts (AAP), O’Reilly Automotive (ORLY), and Group 1 Automotive (GPI) have PE ratios of 20.1x, 19.5x, and 6.6x, respectively.

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EPS projections for AutoZone

For fiscal 2019, Wall Street analysts expect AutoZone’s adjusted EPS to increase 17.6% year-over-year or YoY to $59.33. For fiscal 2020, analysts expect the company’s adjusted EPS to rise 6.1% YoY to $62.95.

Its bottom-line growth is expected to be cushioned by higher sales and a decreased tax burden amid rising expenses. AutoZone’s management hasn’t provided an EPS outlook.

Share repurchases also offer upside potential for the company’s EPS. AutoZone has an extensive share repurchase plan in place. In September, the company announced an additional share repurchase authorization of $1.25 billion. In the first quarter of fiscal 2019, AutoZone repurchased $497 million worth of stock. It had $985 million worth of stock as of November 17, 2018.

A look at EPS projections for peers

Analysts forecast Advance Auto Parts adjusted EPS to rise 32.1% YoY to $7.10 in 2018. For 2019, its EPS are expected to increase 15.1% YoY to $8.16. Management hasn’t provided an EPS outlook for fiscal 2018.

For 2018, analysts expect O’Reilly Automotive’s adjusted EPS to increase 33.7% to $16.11. For 2019, its EPS are forecast to grow 10.5% to $17.81. For 2018, O’Reilly Automotive’s management expects EPS of $15.95–$16.05.

For Group 1 Automotive 2018, analysts project EPS to be up 14.8% to $8.87. For fiscal 2019, EPS are projected to increase 1.6% to $9.01.

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