Analyst Note| Zain Akbari, CFA |
Our $1,690 per share valuation of narrow-moat AutoZone should rise by a mid-single-digit percentage, in line with the shares’ trading uptick after the firm announced strong third-quarter (ended May 7) earnings. The planned uptick stems from strong quarterly sales (up 6%). We still expect mid-single-digit top-line annual growth rates and roughly 20% operating margins in the long term. We view AutoZone favorably, but we suggest investors await a more attractive entry point.