Tariffs positive for U.S. aftermarket auto parts operators, says Mizuho

Mizuho believes President Trump’s 25% tariff announcement on new vehicles made outside the U.S. “represents another positive” for the domestic aftermarket auto parts operators. The tariffs should facilitate an older cohort of cars on the road and, therefore, the need for ongoing repairs, the analyst tells investors in a research note. The firm believes AutoZone (AZO) and its top pick O’Reilly Automotive (ORLY) “remain growthy safe-havens amid a still uncertain spending backdrop and fears around demand destruction from reciprocal tariffs.” Channel checks indicate foot traffic data has picked up for both companies over the last few weeks, Mizuho adds. The firm also sees “developing positives” for CarMax (KMX) given the likelihood higher prices for new vehicles will ultimately lead to a shift towards the relative value of used car transactions. This will also benefit Valvoline (VVV) as new dealers can own the oil change relationship for the first several years post a new vehicle purchase, according to Mizuho.