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AutoZone Inc AZO

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Stellar Quarter at AutoZone Showcases Its Building Professional Segment Strength but Shares Rich

Zain Akbari, CFA Equity Analyst

Analyst Note

| Zain Akbari, CFA |

Narrow-moat AutoZone saw exceptional 29% comparable growth in its third quarter, which will likely lead our $1,240 per share valuation higher by a mid-single-digit percentage. Although we plan to lift our near-term sales and profit targets, we attribute the outperformance to transitory pandemic-related factors, and so we still expect mid-single-digit top-line growth and high-teens operating margins long term.

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Company Profile

Business Description

AutoZone is the premier seller of aftermarket automotive parts, tools, and accessories to do-it-yourself customers in the United States. The company derives an increasing proportion of its sales from domestic commercial customers, roughly three quarters in fiscal 2020, and has a growing presence in Mexico and Brazil. AutoZone had 6,549 stores in the U.S. (5,885), Mexico (621), and Brazil (43) as of the end of fiscal 2020.

Contact
123 South Front Street
Memphis, TN, 38103
T +1 901 495-6500
Sector Consumer Cyclical
Industry Specialty Retail
Most Recent Earnings May 31, 2021
Fiscal Year End Aug 28, 2021
Stock Type Cyclical
Employees 100,000

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