AutoZone Stock Upgraded by BofA Ahead of Next Week’s Earnings Release

AutoZone (AZO) has one of the highest share prices on the market, but one research team thinks the stock could command even more. 

Bank of America Securities on Wednesday upgraded its rating of AutoZone stock to “buy” from “neutral” and increased its target price more than 23% to $4,800. That’s about 24% above Tuesday’s closing price and roughly 17% above the average target price among analysts who follow AutoZone and were polled by Visible Alpha. 

The auto parts company is making gains with both professional and non-professional auto repair customers and may benefit if budget-minded consumers fix their existing cars rather than buy new ones to avoid elevated prices caused by auto tariffs, the analysts said in a research note. 

Fixing Cars Gains Appeal Amid Auto Tariffs, Analysts Say

“Auto parts retailers are likely to pass on the incremental costs” of tariffs, Bank of America wrote, adding: “We think consumers will be more willing to pay the extra cost to fix their existing vehicles than purchasing new vehicles, especially when the auto tariffs could mean a $3,285 increase on average for US-assembled vehicles and higher for imported vehicles.”

Bank of America estimates AutoZone will report 2% year-over-year growth in comparable sales in its fiscal third-quarter results, slated to be released next Tuesday. The analysts are forecasting $38.15 in earnings per share (EPS), above the $36.89 consensus EPS estimate from Visible Alpha. 

AutoZone’s shares are the third most expensive in the S&P 500, after the homebuilder NVR (NVR) and the online travel company Booking Holdings (BKNG). AutoZone shares were recently down 0.4%, closing at $3870.87 on Wednesday, but remain 37% higher than they were a year ago.