AutoZone Ends Fiscal Year on a Solid Note, With Strong Long-Term Prospects; Shares Rich

Our $1,770 per share valuation of narrow-moat AutoZone should not change much after the firm announced solid fourth-quarter (ended Aug. 27) earnings, which included a 6.2% domestic same-store sales increase. With AutoZone performing well in its DIY and commercial segments, we see little reason to alter our long-term expectations (mid-single-digit top-line annual growth rates and roughly 20% operating margins). Despite our favorable view of AutoZone and the industry, we suggest investors await a more attractive entry point.