We think the grocer is likely to reward patient investors.
Strong domestic performance drove full-year results, showing that the wide-moat retailer enjoys enduring competitive advantages that should allow it to deliver returns even as retail changes.
The activist investor's push for a Family Dollar divestiture could refocus resources on the better-positioned Dollar Tree banner.
The wide-moat retailer has considerable advantages at its disposal, but shares are rich.
We expect the firm's long-term performance will be characterized by low-single-digit revenue growth and operating margins over the next decade.
With fuel prices moderating and stronger new vehicle sales cohorts entering the company's sweet spot, we continue to see opportunities for AutoZone to grow while holding profitability near recent levels.
Third-quarter profitability was lackluster, and we think investors should wait for a more attractive entry point.
We're trimming our fair value estimate for the no-moat firm but still suggest investors await a more attractive entry point.