Goldman Sachs upgraded AutoZone (NYSE: AZO) from Sell to Neutral, raising its price target to $3,811 from $3,044, as the firm acknowledges improving fundamentals and the stock’s strong performance in a challenging macroeconomic environment.
The upgrade reflects several key factors, including a recovery in the company’s “do-it-for-me” (DIFM) segment, a rebound in DIY customer trends, and the auto parts sector’s pricing power, which is expected to help cushion potential tariff-related headwinds.
Since being added to Goldman’s Americas Sell list on October 14, 2024, shares of AutoZone have gained nearly 20%, significantly outperforming the S&P 500, which declined 4.8% over the same period. The firm noted that recent domestic trends have improved more than previously anticipated, with AutoZone gaining market share and maintaining resilient demand, particularly among its DIY customer base.
Despite trading at a next-twelve-month EV/EBITDA multiple above historical averages, Goldman sees this as a reflection of investor preference for defensive names amid economic uncertainty.
AutoZone is scheduled to report fiscal Q3 2025 results on July 20. Wall Street consensus estimates call for earnings per share of $37.19 and revenue of $4.411 billion.
AutoZone has a consensus rating of “Overweight” and a mean price target of $3,864.64, which implies a potential upside of just 1.90% from the current stock price.
