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AutoZone (AZO) Increases Despite Market Slip: Here's What You Need to Know

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AutoZone (AZO - Free Report) ended the recent trading session at $3,372.82, demonstrating a +1.21% swing from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily loss of 1.46%. Meanwhile, the Dow gained 0.65%, and the Nasdaq, a tech-heavy index, lost 3.07%.

The the stock of auto parts retailer has risen by 2.8% in the past month, leading the Retail-Wholesale sector's gain of 2.27% and the S&P 500's gain of 1.08%.

Market participants will be closely following the financial results of AutoZone in its upcoming release. The company's earnings per share (EPS) are projected to be $29.11, reflecting a 0.76% increase from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $3.98 billion, showing a 3.13% escalation compared to the year-ago quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $152.94 per share and a revenue of $18.79 billion, representing changes of +4.65% and +1.63%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for AutoZone. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.09% decrease. At present, AutoZone boasts a Zacks Rank of #3 (Hold).

In terms of valuation, AutoZone is currently trading at a Forward P/E ratio of 21.79. Its industry sports an average Forward P/E of 24.18, so one might conclude that AutoZone is trading at a discount comparatively.

We can additionally observe that AZO currently boasts a PEG ratio of 1.84. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Automotive - Retail and Wholesale - Parts industry currently had an average PEG ratio of 1.84 as of yesterday's close.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 26, this industry ranks in the top 11% of all industries, numbering over 250.

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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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