AutoZone (AZO) Stock Forecast & Price Target

AutoZone's average ticket increased by 3.9%, primarily driven by a 2.8% like-for-like same SKU inflation and an enhanced product mix, indicating effective pricing strategies and inventory management. The company's domestic Do-It-Yourself (DIY) sales demand remained robust, with same-store sales increasing by 2.2% in the fourth quarter, reflecting strong consumer engagement and loyalty. Additionally, the domestic Commercial (Do-It-For-Me) business showcased impressive growth, with sales rising 6% and same-store sales up approximately 11%, signaling a healthy expansion in this key segment.

AutoZone has revised its earnings per share (EPS) estimate downward to $153.58 for FY26, reflecting a significant decline from a previous estimate of $170.00. This change indicates concerns over a reduced EBIT margin, which has decreased from 19.5% to 18.0%, largely due to increased expenses associated with store growth and approximately $360 million in Last In, First Out (LIFO) charges. Additionally, despite reporting in-line sales for Q4, the company faced challenges with lower EPS, suggesting potential issues in maintaining profitable growth amidst rising costs.