- Goldman Sachs downgrades AutoZone (NYSE:AZO) to Neutral from Buy with a price target of $470 (unchanged). Analyst Matthew Fassler thinks the stock's multiple is fair and sees in-line stock performance.
- "The stock has approached our prior 12-month $470 target, rising with a strong market despite sluggish recent fundamentals. We are guarded on the aftermarket sector given fading demand drivers, namely in the DIY sub-segment, where AZO sharply over-indexes vs. peers. In our view, the company continues to execute well, but lofty returns appear to serve as impediment to a full-on commitment to growing commercial. Also, ROC looks poised to fall from powerful peak levels. After AZO reported a tough August quarter, it acknowledged sluggish sales, having blamed weather in the prior year, and defined initiatives to propel the top-line. We thought these sales initiatives would buy AZO some time. We believe the share price has received some benefit of the doubt since, rising with the market, prompting our downgrade."
- AZO closed at $465.70 yesterday, with a 52-week range of $341.98-470.47.