In a report released yesterday, Simeon Gutman from Morgan Stanley reiterated a Buy rating on AutoZone, with a price target of $4,700.00.
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Simeon Gutman has given his Buy rating due to a combination of factors surrounding AutoZone’s current market situation. The recent Chapter 11 filing by First Brands Group has led to a temporary decline in the stock prices of DIY auto retailers, including AutoZone. However, Gutman sees this as an opportunity to invest in a strong asset, as AutoZone is not directly exposed to First Brands’ credit risks or financing issues.
Additionally, Gutman highlights that AutoZone’s inventory financing arrangements are secure and unlikely to be impacted by First Brands’ financial difficulties. AutoZone’s robust financial health, demonstrated by its investment-grade credit rating and substantial free cash flow, further supports the Buy recommendation. Moreover, AutoZone’s limited merchandise exposure to First Brands suggests minimal risk to its supply chain, reinforcing the positive outlook for the stock.
In another report released on October 8, Bank of America Securities also maintained a Buy rating on the stock with a $4,800.00 price target.
AZO’s price has also changed moderately for the past six months – from $3575.120 to $3967.280, which is a 10.97% increase.