UPDATE: Goldman Sachs Reiterates Buy Rating, Raises PT on AutoZone on Raised EPS Forecasts

In a report published Wednesday, Goldman Sachs reiterated its Buy rating on AutoZone AZO, and raised its price target from $420.00 to $435.00. Goldman Sachs noted, “Auto parts sales remain pressured by the continued overhang of the weather. We are wary of investor fatigue around the weather story as a driver of investment decisions, and remain resolved to see the sector through to the lapping of poor weather and, we believe, acceleration. In addition, the story now faces a new challenge, as the tax refund shift is further depressing results; if AZO's assessment is accurate, these drove a sharp, sudden slowdown in sales late in the quarter ended February 9. Because WMT and a number of restaurant firms have cited similar volatility in their businesses, we view this explanation as credible (if unwelcome), and this moment as the bottom for trends, and expect acceleration off current levels. Moreover, AZO's financial model remains powerful, with the best ROC in our coverage. While this is not sufficient to drive outperformance, it leads us to give the stock more latitude when assessing near-term factors. We maintain our Buy rating and raise our 12-month target to $435 from $420 as we roll forward forecasts.” AutoZone closed on Tuesday at $376.15.