AutoZone Set to Unveil Second-Quarter Earnings Amid Market Challenges
AutoZone, Inc. (AZO), a key player in the automotive retail sector, has a market capitalization of $54.2 billion. Based in Memphis, Tennessee, the company operates over 6,000 stores throughout the U.S., Mexico, and Brazil, catering to both retail customers and professional auto repair shops. The firm is gearing up to announce its fiscal second-quarter earnings for 2025 on Tuesday, Feb. 25.
Analysts Predict Modest Earnings Growth
In anticipation of this earnings report, analysts forecast a profit of $29.11 per share on a diluted basis for AZO, reflecting a slight increase from $28.89 per share during the same quarter last year. Historically, the company has outperformed Wall Street’s earnings per share (EPS) estimates in two of its last four quarterly reports while missing expectations on the other two occasions.
Yearly Projections Look Positive
For the entire fiscal year 2025, analysts project AZO to achieve an EPS of $152.94, which represents a 4.7% increase from the $146.14 reported in fiscal 2023. Furthermore, expectations for fiscal 2026 are even brighter, with an anticipated rise of 13.4% to $173.35.
Performance Lagging Behind Major Indices
Over the past 52 weeks, AZO shares have witnessed a rally of 20.1%. However, this performance has been outpaced by the S&P 500, which gained 25%, and the Consumer Discretionary Select Sector SPDR Fund (XLY), which rose by 32% in the same timeframe.
Mixed Earnings Report Raises Concerns
In its Q1 earnings report released on Dec. 10, AZO’s shares reacted positively, despite missing both profit and revenue forecasts. This shortfall was attributed to rising raw material costs and a stronger dollar. Demand for automotive parts remains robust as consumers keep older vehicles running due to elevated new car prices. However, the company faces challenges from increasing material costs and potential tariffs.
Analyst Sentiment Indicates Strong Confidence
Currently, analysts maintain a generally bullish outlook on AZO stock, assigning it a “Strong Buy” rating overall. Among 26 analysts, 20 advocate for a “Strong Buy,” one suggests a “Moderate Buy,” four recommend a “Hold,” and one issues a “Strong Sell.”
The average analyst price target for AZO stands at $3,658.52, suggesting a potential upside of 10.9% from current levels.
On the date of publication,
Kritika Sarmah
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