Jim Cramer Says AutoZone Is A 'Paradigm Stock': Here's Why Its Fate Hinges On The Fed

Zinger Key Points
  • AutoZone reported better-than-expected financial results on Monday.
  • "It's kind of a Fed stock so to speak and I like it. I like it a lot," Cramer says.

AutoZone Inc AZO shares are trading lower after the company reported fiscal fourth-quarter results. Depending on your expectations for rate hikes, Jim Cramer says it might be time to buy.

"This is a paradigm stock worth owning if you believe that the Fed's not done," Cramer said Monday on CNBC's "Squawk On The Street."

What To Know: AutoZone beat average analyst estimates when it reported fiscal fourth-quarter revenue of $5.35 billion on Monday. The company also topped quarterly earnings estimates when it reported fourth-quarter earnings of $40.51, which beat expectations for $38.58 per share. 

Cramer said it was a "fantastic" report. 

"Same store sales were up six [percent], they bought back $4.4 billion worth of stock. What are they? They are a do-it-yourself auto company. They make it so that you can keep your car longer," Cramer said. 

A properly maintained car can run for a long time, which can help consumers avoid having to spend on new vehicles. Cramer suggested that more people will opt for fixing existing vehicles as long as rates continue to rise. 

"So it's kind of a Fed stock, so to speak, and I like it. I like it a lot," Cramer said. 

He's not alone in being bullish on AutoZone, data gathered by Benzinga finds that six analysts have a Buy rating, and three have an Overweight rating on the stock.

The latest CPI inflation data is expected to act as a confirmation of recent indicators and push the Fed toward another 0.75% rate hike in its upcoming meeting. 

Related Link: Analyst Hikes CPI Inflation Forecast, Expects Fed To Raise Interest Rates Another 1.75% By February

AZO Price Action: AutoZone has a 52-week high of $2,362.24 and a 52-week low of $1,703.32.

The stock was down 4.37% at $2,070.92 at the time of publication, according to Benzinga Pro.

Photo: Phillip Pessar from flickr

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Posted In: EarningsLong IdeasNewsFederal ReserveTrading IdeasCNBCJim Cramer