UPDATE: Morgan Stanley Downgrades AutoZone to Underweight on Payroll Tax Expiration

Morgan Stanley downgraded AutoZone

from Equal-weight to Underweight and announced a $340 price target. Morgan Stanley noted, "AZO generates 85% of its auto parts revenue from DIY, a segment we believe is most at risk to payroll tax expiration given its skew towards low income consumers. Also, F1Q13 marked the third consecutive quarter of significantly slower commercial growth, and our channel checks suggest that NAPA and ORLY maintain a clear edge in this area, despite AZO's push to gain share. Lastly, AZO comps have a high correlation with dollar stores, which have seen trends decelerate." AutoZone closed at $356.17 on Monday.