Sterne Agee issued an earnings preview on AutoZone, Inc. AZO Wednesday. The firm maintained an Underperform rating and $550 price target.
Consensus for fiscal Q1 EPS was $7.16 on revenue of $2.21 billion.
Analyst Ali Faghri commented that “AZO reports fiscal first quarter 2015 earnings (Sept. - Nov. period) on December 9, 2014. We are modeling Q1 EPS of $7.15, driven by a +2.0 percent same-store sales comp (consensus at +2.6 percent), +5.5 percent y/y revenue growth, and 20 bps of y/y gross margin expansion.”
The firm expected “same-store sales comps of 2.0 percent in the fiscal first quarter of 2015, which would imply a modest deceleration on both a one- and two-year basis with the prior period.”
The forecast included “EPS of $35.19 in 2015 versus consensus of $35.35, a 11.4 percent increase on a year-over-year basis. Our estimate assumes 4.6% revenue growth and same-store sales growth of 1.7 percent. We expect gross margin to increase by 40 bps in 2015.”
2016 EPS was estimated at $38.82 “versus consensus of $39.80, a 10.3 percent increase on a year-over-year basis. Our estimate assumes revenue growth of 4.5 percent and same-store sales growth of 1.7 percent. We expect gross margin expansion of 20 bps in 2016.”
AutoZone recently traded at $567.53, down 0.26 percent.
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