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Chicago, IL – October 28, 2022 – Today, Zacks Investment Ideas feature highlights AutoZone (AZO - Free Report) .
This Leading Auto Stock Navigates the Bear Market with Ease
A counter-trend rally has begun to take shape, as the historically bullish fourth quarter has started out with a bang. October has witnessed the S&P 500 return about 7%, living up to its reputation as the best month in midterm years. While the major trend in stocks remains down, certain companies have navigated this difficult market environment better than others.
One such company is AutoZone, a leading retailer and distributor of automotive replacement parts and accessories. One of the great stock market stories over the past several decades, the company provides various components for cars, utility vehicles, vans, and light trucks. Its products include familiar vehicle parts such as batteries, A/C compressors, belts and hoses, fuel pumps, fuses, starters, and thermostats.
AZO maintains stores in the U.S., Puerto Rico, Mexico and Brazil, operating approximately 6,800 locations. In addition to storefronts, AutoZone also sells its products and accessories through several websites including AutoZone.com. The stock is currently hitting an all-time high, a sign of strength as most stocks continue to hover in bear market territory.
Part of the Zacks Automotive – Retail and Wholesale – Parts industry which ranks in the top 33% of all industry groups, AZO sports a highest-possible rating of 'A' in each of our Zacks Growth, Momentum, and overall VGM Style Score categories. This top score indicates AZO's growth prospects are still enticing and its financial strength is sound.
Quantitative research studies suggest that about half of a stock's price appreciation is due to its industry grouping. By investing in stocks in the top-performing industry groups, investors can add a 'tailwind' to their trading success. Let's take a deeper look at this leading company.
Sales and Earnings Trends
In fiscal 2022, AZO reported an 11.1% year-over-year increase in net revenues to $16.3 billion, with domestic same store sales rising 8.4%. The company's sustained revenue growth is striking as it has generated record sales for 25 consecutive years. The replacement part company also generated net income of $2.4 billion during the most recent fiscal year, up 11.9% on a year-over-year basis.
The AZO growth engine is expected to remain hot this year as analysts have increased their fiscal 2023 EPS estimates by 1.62% in the past 60 days. The Zacks Consensus Estimate now stands at $125.22/share, representing growth of 6.85% relative to fiscal '22. Sales are seen climbing by 4.88% to $17.05 billion.
AZO has established a healthy track record of earnings surprises as the firm has surpassed estimates in each of the past four quarters, with an average earnings surprise of 16.59% over that timeframe. The stock has performed admirably this year and is up nearly 20% - widely outperforming the market.
What the Zacks Model Unveils
The Zacks Earnings ESP (Expected Surprise Prediction) identifies companies that have recently witnessed positive earnings estimate revision activity. The idea is that this more recent information can serve as a better predictor of the future, giving investors a leg up during earnings season. When combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.
With an Earnings ESP +6.29% and a Zacks Rank #3 (Hold) rating, another earnings beat may be in the cards for AZO investors when the company reports fiscal Q1 results on December 6th.
Make sure to keep an eye on AZO as the stock looks primed to continue its dominant trend.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: AutoZone
For Immediate Release
Chicago, IL – October 28, 2022 – Today, Zacks Investment Ideas feature highlights AutoZone (AZO - Free Report) .
This Leading Auto Stock Navigates the Bear Market with Ease
A counter-trend rally has begun to take shape, as the historically bullish fourth quarter has started out with a bang. October has witnessed the S&P 500 return about 7%, living up to its reputation as the best month in midterm years. While the major trend in stocks remains down, certain companies have navigated this difficult market environment better than others.
One such company is AutoZone, a leading retailer and distributor of automotive replacement parts and accessories. One of the great stock market stories over the past several decades, the company provides various components for cars, utility vehicles, vans, and light trucks. Its products include familiar vehicle parts such as batteries, A/C compressors, belts and hoses, fuel pumps, fuses, starters, and thermostats.
AZO maintains stores in the U.S., Puerto Rico, Mexico and Brazil, operating approximately 6,800 locations. In addition to storefronts, AutoZone also sells its products and accessories through several websites including AutoZone.com. The stock is currently hitting an all-time high, a sign of strength as most stocks continue to hover in bear market territory.
Part of the Zacks Automotive – Retail and Wholesale – Parts industry which ranks in the top 33% of all industry groups, AZO sports a highest-possible rating of 'A' in each of our Zacks Growth, Momentum, and overall VGM Style Score categories. This top score indicates AZO's growth prospects are still enticing and its financial strength is sound.
Quantitative research studies suggest that about half of a stock's price appreciation is due to its industry grouping. By investing in stocks in the top-performing industry groups, investors can add a 'tailwind' to their trading success. Let's take a deeper look at this leading company.
Sales and Earnings Trends
In fiscal 2022, AZO reported an 11.1% year-over-year increase in net revenues to $16.3 billion, with domestic same store sales rising 8.4%. The company's sustained revenue growth is striking as it has generated record sales for 25 consecutive years. The replacement part company also generated net income of $2.4 billion during the most recent fiscal year, up 11.9% on a year-over-year basis.
The AZO growth engine is expected to remain hot this year as analysts have increased their fiscal 2023 EPS estimates by 1.62% in the past 60 days. The Zacks Consensus Estimate now stands at $125.22/share, representing growth of 6.85% relative to fiscal '22. Sales are seen climbing by 4.88% to $17.05 billion.
AZO has established a healthy track record of earnings surprises as the firm has surpassed estimates in each of the past four quarters, with an average earnings surprise of 16.59% over that timeframe. The stock has performed admirably this year and is up nearly 20% - widely outperforming the market.
What the Zacks Model Unveils
The Zacks Earnings ESP (Expected Surprise Prediction) identifies companies that have recently witnessed positive earnings estimate revision activity. The idea is that this more recent information can serve as a better predictor of the future, giving investors a leg up during earnings season. When combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.
With an Earnings ESP +6.29% and a Zacks Rank #3 (Hold) rating, another earnings beat may be in the cards for AZO investors when the company reports fiscal Q1 results on December 6th.
Make sure to keep an eye on AZO as the stock looks primed to continue its dominant trend.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.