Morgan Stanley Initiates Coverage On AutoZone On Balanced Risk/Reward

In a report released Tuesday, Morgan Stanley analyst Simeon Gutman initiated coverage on AutoZone

with an Equal-Weight rating and a price target of $575. In the report, Gutman focuses on AutoZones low teen earnings growth, claiming upside potential is held mild with 13x EPS estimated for 2015. Morgan Stanley believes secular headwinds are to come with auto innovations and spending constands with lower-end consumers but adds lower-end consumer spending could improve later in 2014. Gutman suspects the harsh winter should contribute to higher vehicle damage in the Summer. Morgan Stanley gives credit to AutoZone's financial model, with investments in DIFM and solid capital allocation through buybacks program.