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AutoZone (AZO) Gains As Market Dips: What You Should Know

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In the latest trading session, AutoZone (AZO - Free Report) closed at $2,501, marking a +1.63% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.39%. At the same time, the Dow lost 0.14%, and the tech-heavy Nasdaq lost 0.1%.

Prior to today's trading, shares of the auto parts retailer had gained 6.95% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.84% and the S&P 500's gain of 6.77% in that time.

AutoZone will be looking to display strength as it nears its next earnings release, which is expected to be December 6, 2022. In that report, analysts expect AutoZone to post earnings of $24.82 per share. This would mark a year-over-year decline of 3.39%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.82 billion, up 4.16% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $125.33 per share and revenue of $17.02 billion, which would represent changes of +6.95% and +4.71%, respectively, from the prior year.

Any recent changes to analyst estimates for AutoZone should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.09% higher. AutoZone is currently a Zacks Rank #3 (Hold).

Looking at its valuation, AutoZone is holding a Forward P/E ratio of 19.64. For comparison, its industry has an average Forward P/E of 18.1, which means AutoZone is trading at a premium to the group.

We can also see that AZO currently has a PEG ratio of 1.48. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Automotive - Retail and Wholesale - Parts stocks are, on average, holding a PEG ratio of 1.74 based on yesterday's closing prices.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 168, putting it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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