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AutoZone is currently experiencing a pullback in its stock price, creating a buying opportunity for investors. Despite a 200% increase from its 2020 low, the stock is still considered a buy-and-hold-forever stock with strong potential for growth in the international market. Analysts and institutions are optimistic about the stock’s future performance.
AutoZone’s Executive Transition Is Ultra-Smooth
AutoZone recently announced its executive transition and opted for an internal replacement. This decision has paid off, as evidenced by the positive Q4 results and the company’s plans for international expansion. The promotion of key executives demonstrates a cohesive senior management team, set to lead the company to further success.
The Q4 results exceeded expectations, with a 6.4% increase in net revenue compared to the previous year. This growth was driven by the company’s strong performance in international markets, particularly in Brazil and Mexico. Despite a slight increase in operating expenses, AutoZone’s improved gross margin and consistent share repurchases indicate a favorable outlook for future earnings growth.
AutoZone: A Top Shelf Name In Autoparts
AutoZone is outperforming its competitor, Advance Auto Parts, in various aspects. Although AutoZone does not pay dividends, it actively repurchases its own shares, benefiting shareholders. The company’s share buyback program, coupled with its manageable debt load, positions it well for sustained value creation.
Analysts And Institutions Own AutoZone
The majority of AutoZone’s stock is owned by institutions, who have been selling since Q3. This selling activity can be attributed to profit-taking following the stock’s significant run-up. However, analysts still have a positive outlook on the stock and rate it as a Moderate Buy with a price target above $2470.
AutoZone’s stock is currently trading above critical support levels and shows signs of stability. If the market can sustain this level, the stock may retest its all-time high. In the event of a market downturn, firmer support levels near $2,300 are expected to prevent a significant decline.
