AutoZone (AZO) Stock Forecast & Price Target

AutoZone demonstrates a strong financial outlook, reflected in a 5.9% increase in transaction count on a same-store basis, along with domestic Commercial sales increasing by over 12%, indicating substantial market share gains. The company reported a robust average ticket growth of 6.1%, driven largely by same-SKU inflation and sustained demand in the DIY segment, where same-store sales rose 2.2%. International performance also contributes positively, with same-store sales growing 3.7% in constant currency and an impressive 11.2% when accounting for foreign exchange impacts, showcasing AutoZone's resilience and growth potential across its markets.

AutoZone's negative outlook is primarily attributed to decreased earnings per share (EPS) forecasts, reflecting a reduction from $189.53 to $185.91 for FY27, as a result of increased selling, general, and administrative (SG&A) expenses, and a lower EBIT margin expectation of 18.0%. The company's performance has been adversely impacted by weak traffic metrics, including a 3.4% decline in do-it-yourself (DIY) traffic, compounded by unfavorable weather conditions and the absence of last year's hurricane-related sales boost. Additionally, the Q2 EPS forecast has been lowered to $27.04, indicating a 4.4% reduction, alongside an anticipated EBIT margin of only 16.2%, further highlighting underlying challenges within the business.