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Memphis, Tennessee-based www.barchart.com, Inc. (AZO) is a leading retailer and distributor in the automotive aftermarket sector. With a market cap of $53.5 billion, the company offers a wide range of automotive parts, accessories, and maintenance products for both DIY and commercial customers.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and AutoZone fits this criterion perfectly. AutoZone is renowned for its vast and diverse inventory of automotive parts and accessories, its significant market presence with over 7,000 stores across the U.S., Mexico, Brazil, and China, and its robust integration of physical retail with advanced digital diagnostic and repair solutions.
However, the auto parts retailer has fallen 4.2% from its 52-week high of $3,256.37, recorded in March. AutoZone's shares have surged almost 11% over the past three months, outperforming the broader Nasdaq Composite's ($NASX) marginal gain during the same period.
Longer term, AZO stock has gained 20.6% on a YTD basis, which outpaces NASX's 15.9% increase over the same period. However, AZO has surged 21.2% over the past 52 weeks, lagging behind NASX's almost 25% gains.
Nevertheless, AZO has consistently traded above its 200-day moving average since November last year and has also remained mostly above its 50-day moving average during the period despite a few fluctuations.
AutoZone has outperformed in 2024 due to its resilience in the face of industry challenges, strong demand driven by an aging fleet of gasoline vehicles, and consistent revenue growth, even amidst economic volatility and concerns about electric vehicle market share.
However, despite beating Q3 EPS estimates on strong demand for automotive parts, the stock fell 3.5% on May 21 due to lower-than-expected net sales of $4.2 billion. Furthermore, the stagnation in domestic same-store sales, which remained flat year-over-year, suggested weaker-than-anticipated growth in its core business.
In contrast, rival Advance Auto Parts, Inc. (AAP) is underperforming AZO. AAP shares have declined 38% over the past 52 weeks and a 36.5% dip on a YTD basis, highlighting AZO's relative strength in comparison.
Due to the stock's recent strong price action, analysts remain bullish about its prospects. Among the 22 analysts covering the stock, there is a consensus rating of “Strong Buy,” and the mean price target of $3,215.55 is a premium of just 3.1% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
