AutoZone (AZO), the retailer of auto replacement parts and accessories, scored a rating upgrade from a top analyst from Bank of America, ahead of its fiscal third-quarter results scheduled on May 27, 2025. Bank of America analyst Robert Ohmes upgraded AZO stock to Buy from Hold and boosted the price target to $4,800 from $3,900, indicating an upside potential of about 24%. The 5-star analyst expects AutoZone to gain from the current macro backdrop, in which new cars are expensive due to tariffs, with customers expected to be more willing to pay extra for fixing their existing vehicles than buying a new one.
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Top Analyst Turns Bullish on AZO Stock
Ohmes expects AutoZone to deliver strong top line in Q3 FY25, due to tax refunds and favorable trends reflected by recent data. He expects the company to report Q3 FY25 EPS of $38.15 and domestic comparable sales growth of 2%, compared to the consensus estimates for EPS and domestic comps of $36.80 and 2.4%, respectively.
The analyst emphasized that he expects strong sales due to the sequential acceleration in Bloomberg Second Measure data (1.88% in Q2 FY25 vs. 5.83% in Q3 FY25). Notably, weekly observed sales accelerated in March and increased by high single digits, likely due to favorable tax refunds.
Also, Bank of America’s aggregated credit and debit card data suggested resiliency in auto aftermarket spending.
Is AZO a Good Stock to Buy?
Several analysts have raised their price target for AutoZone stock, ahead of the Q3 FY25 results. Moreover, Oppenheimer analyst Brian Nagel upgraded AutoZone stock to Buy from Hold with a price target of $4,600. The 5-star analyst views auto parts retailers with well-positioned chains as attractive safe havens amid ongoing macro challenges.
With 21 Buys and two Holds, Wall Street has a Strong Buy consensus rating on AutoZone stock. The average AZO stock price target of $3,982.05 implies 2.8% upside potential from current levels. AZO stock has risen about 21% so far this year.
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