AutoZone (AZO) PT Lowered to $3,500 at Citi

Citi analyst Steven Zaccone lowered the price target on AutoZone (NYSE: AZO) to $3,500.00 (from $3,787.00) while maintaining a Buy rating.

The analyst comments "AZO reported F4Q results that missed on both the top and bottom line. The auto parts retail backdrop is clearly seeing a weaker demand environment as lower-income consumers tighten budgets, defer some big-ticket auto maintenance, and pull back on discretionary DIY spending. Specific to AZO, DIY seems to be troughing along the bottom and there was some sequential improvement in the commercial DIFM segment (transaction driven). The growth is still slower than expected. In our view, weaker industry growth is largely to blame. We lower estimates to reflect these contributing factors along with incremental pressure from FX and LIFO impact in FY25. With Street estimates likely “reset” off this print, the model has a better setup for a return to earnings growth in FY26. We recognize AZO shares trade at a premium to history, but they are still at a sizable discount to high quality retail peers. Reiterate Buy."

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