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Here's Why AutoZone (AZO) Looks Poised for Q1 Earnings Beat

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AutoZone, Inc. (AZO - Free Report) is set to release fiscal first-quarter fiscal 2022 results tomorrow, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at $20.83 per share and $3.36 billion, respectively.

The leading provider of automotive replacement parts posted outstanding results for the last reported quarter on robust comparable sales growth. Over the trailing four quarters, AutoZone surpassed the Zacks Consensus Estimate on all occasions, with the average being 18.6%. This is depicted in the graph below:

AutoZone, Inc. Price and EPS Surprise

AutoZone, Inc. Price and EPS Surprise

AutoZone, Inc. price-eps-surprise | AutoZone, Inc. Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for fiscal first-quarter earnings per share has moved 18 cents north in the past seven days. The bottom-line projection indicates an increase from the year-ago earnings of $18.61 per share. The Zacks Consensus Estimate for quarterly revenues implies a 6.5% rise from the prior-year level.

Factors to Note

Sales growth in both retail DIY (‘Do-It-Yourself) and commercial DIFM (‘Do-It-For-Me) businesses is likely to have boosted the firm’s revenues during the to-be-reported quarter. The Zacks Consensus Estimate for domestic commercial sales is pegged at $812 million, calling for an increase from $695 million recorded in the year-ago quarter. Store expansion initiatives, fast delivery and high-quality products are also anticipated to have positively impacted AZO’s top line in the fiscal first quarter.

The company’s digitalization efforts to enhance customers’ shopping experience are likely to have boosted the top line during the fiscal first quarter. AutoZone’s initiatives to enhance in-store systems and website traffic are likely to reflect on the quarterly performance. Ship-to-home next day, buy online and curbside pick-up options are expected to have supported AutoZone’s sales. The company’s cost-reduction efforts are also likely to have aided margins.

Earnings Whispers

Our proven model predicts an earnings beat for AutoZone this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: AutoZone has an Earnings ESP of +3.76%. This is because the Most Accurate Estimate is pegged at $21.61 per share, which is 78 cents higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: AutoZone carries a Zacks Rank of 2 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

3 Top-Ranked Auto Stocks to Buy

If you wish to invest in the auto space, you can consider adding Tesla (TSLA - Free Report) , Harley-Davidson (HOG - Free Report) and Goodyear Tire (GT - Free Report) to your portfolio, each sporting a Zacks Rank #1.

Tesla: Tesla is riding on rising deliveries of Models 3 and Y. With China being the biggest EV market, Tesla’s ambitious production plans in the country bode well. The company’s energy generation and storage revenues are also boosting earnings. 

The electric vehicle king has an expected earnings growth rate of 167% for the current year. The Zacks Consensus Estimate for its earnings for the current year has been revised upward by 6 cents over the past 30 days. Tesla beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed once.

Harley Davidson: In sync with long-term growth objectives to optimize the product portfolio and expand the customer base, Harley-Davidson is focusing on motorcycle models and technologies that better align with market trends. The firm's turnaround plan — dubbed as ‘Rewire’ — and five-year strategic plan ‘Hardwire’ boost optimism.

The iconic motorcycle maker has an expected earnings growth rate of an astounding 36,100% for the current year. The Zacks Consensus Estimate for its earnings for the current year has been revised upward by 2 cents over the past 30 days. Harley-Davidson beat the Zacks Consensus Estimate for earnings in three of the last four quarters and missed once.

Goodyear: Goodyear’s acquisition of Cooper Tire, which closed in June, has strengthened the firm's leadership position in the global tire industry. Frequent rollout of innovative products and services, electrification efforts, and restructuring initiatives are also set to drive the firm’s prospects.

Goodyear has an expected earnings growth rate of 196.86% for the current year. The Zacks Consensus Estimate for its earnings for the current year has been revised upward by 42 cents over the past 30 days. GT beat the Zacks Consensus Estimate for earnings in the last four quarters.

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