AutoZone’s Price Target Cut to $3,817 as Gross Margin Falls to 52.2%
AZO•Truist Financial lowered AutoZone’s price target to $3,817, still implying a 24.8% upside after the stock slid 9.6% on Q3 results. The retailer reported $38.07 EPS, a 52.2% gross margin (-57bps), 8.4% revenue growth to $4.8B, 82 new stores and $1.6B in planned capex.
1. Price Target Revision and Stock Reaction
Truist Financial trimmed AutoZone’s price target to $3,817, reflecting concerns over profitability pressures while still indicating roughly 24.8% upside from recent levels. The announcement coincided with a 9.6% stock decline following mixed market reactions to the third-quarter report.
2. Third-Quarter Financial Performance
AutoZone delivered $38.07 in earnings per share, topping forecasts by $1.90, as revenue rose 8.4% year-over-year to $4.8 billion. However, gross margin narrowed to 52.2%, down 57 basis points, with domestic same-store sales up 4% and commercial sales jumping 10.4%.
3. Global Expansion and Capital Spending
The company expanded its network by opening 82 new stores worldwide during the quarter and is committing $1.6 billion in capital investments for the year. Spending will focus on additional store openings and technology upgrades to support future growth.
