AZO - AutoZone looks to extend long streak of profit beats next week

Wells Fargo is constructive on AutoZone (NYSE:AZO) ahead of the retailer's earnings report next week. Analyst Zachary Fadem notes that AZO shares have outperformed (+16% vs. +6.8% SPX) since FQ4 with EPS revisions likely moving higher and defensive/quality characteristics increasingly well suited for today's volatile market backdrop. "Based on our checks, we see upside to our +5.5% comp estimate (+120bps vs. Consensus) via underlying DIY resilience, inflation pass through (+2%-3% vs. FQ4) and likely +DD% DIFM gains. Low income consumer headwinds are entering the narrative; and while the market has not taken kindly to gross margin pressures this EPS season, we see improving flowthrough vs. FQ4 driving 1H FY22 upside." The broad view is that the auto part group remains structurally stronger while AZO's reasonable valuation, DIY leadership, DIFM share gains, pricing power and big buybacks warrant further upside. Wells Fargo reiterates an Overweight rating on AZO and assigns a

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AutoZone looks to extend long streak of profit beats next week