AutoZone price target lowered to $4,500 from $4,850 at DA Davidson

DA Davidson analyst Michael Baker lowered the firm’s price target on AutoZone (AZO) to $4,500 from $4,850 but keeps a Buy rating on the shares after its Q1 earnings miss. The company’s investments in their commercial business were on full display this quarter, driving continued share gains along with DIY results starting to trend positively, the analyst tells investors in a research note. Margins were weaker than expected, but that is due to accelerated store growth plans as AutoZone is investing comp upside back into the business, the firm noted. Increased investments will compress operating margins in the near-term, and the news pressured the stock, but longer-term, the current investments in new stores and distribution capabilities will likely pay off in better comps, DA Davidson added.