AutoZone stock price target lowered to $4,400 by Jefferies on Q1 results

Investing.com - Jefferies has lowered its price target on AutoZone (NYSE:AZO) to $4,400 from $4,750 while maintaining a Buy rating following the company’s first-quarter fiscal 2026 results. The stock, currently trading at $3,406, has taken a significant 8.5% hit over the past week, though analyst targets still suggest a potential 32% upside from current levels.

AutoZone reported earnings per share of $31.04 for the quarter, falling short of the Jefferies estimate of $32.07 and the consensus expectation of $32.71.

The earnings miss was attributed to non-cash LIFO gross margin headwinds of approximately 210 basis points and elevated SG&A expenses, which increased 70 basis points to 34.0% compared to the estimate of 33.2%.

Despite these challenges, Jefferies highlighted AutoZone’s robust commercial (DIFM) growth of 14.5% during the quarter, suggesting strong momentum in this segment.

The firm expects AutoZone’s commercial business strength to offset near-term SG&A pressures as the company leverages its pipeline of approximately 100 megahubs and accelerates new store expansion, with 350-360 new locations planned for fiscal 2026 compared to 304 openings in fiscal 2025.

In other recent news, AutoZone’s fiscal first-quarter results have led several financial firms to lower their price targets for the company. Truist Securities adjusted its target to $4,076, citing alignment with its estimates but noting that results fell below broader expectations due to LIFO charges and higher SG&A run rates. BMO Capital also lowered its target to $4,400, pointing to higher-than-expected SG&A spending that affected margins. DA Davidson set a new target of $4,500, attributing the decision to margin pressure from AutoZone’s accelerated store growth plans and increased investments. Similarly, Guggenheim reduced its target to $4,400, although they acknowledged the results were in line with their expectations and expressed support for the company’s growth strategy. Wells Fargo decreased its target to $4,500, highlighting concerns over SG&A expenses. Despite these adjustments, many firms maintained positive ratings on AutoZone, reflecting continued confidence in the company’s long-term strategy. These developments highlight the impact of recent financial results on analyst perceptions and future expectations for AutoZone.

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