UPDATE: Stifel Nicolaus Raises PT on AutoZone on Multiple Positive Factors
In a report published Wednesday, Stifel Nicolaus analyst David Schick reiterated a Buy rating on AutoZone (NYSE: AZO), and raised the price target from $410.00 to $470.00.
In the report, Stifel Nicolaus noted, “Our auto parts thesis remains intact. And AZO keeps their focus, growing margin and buying back stock – and the summer heat generating winter-seeded breakage is starting to occur. A non-winter from 2011-2012 reduced parts breakage for the following year and we are now starting to see delayed breakage flow through the model. One month is not a trend (as management noted) but our proprietary Retail READ consumer survey continues to show auto parts breakage accelerating into May. The combination of stronger topline and improving product margin trends could drive earnings higher throughout the remainder of the calendar year, and subdued gasoline prices means even discretionary spending may happen (assuming macroeconomic trends do not worsen). Industry strength bodes well for ORLY (Buy, $112.21) and AAP (Hold, $87.18) as well, though fiscal calendar differences mean AAP 1Q13 (reporting on Thursday 5/23) will have somewhat less exposure to better trends into April/May. AZO now trades at 9.1x EV/EBITDA on our CY14 estimates, or roughly a 10% premium to our coverage group.”
AutoZone closed on Tuesday at $427.84.
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