AutoZone Posts Solid Q3 Results; Continues Share Gain

Analysts at Citigroup reiterate their "buy" rating on AutoZone Inc AZO, while raising their estimates for the company. The target price for AZO has been raised from $198 to $224. AZO posted Q3 EPS above the Street expectations. AZO has also repurchased 1.5 million shares during the quarter for $266 million, which “contributed $0.08 to EPS. According to Citigroup, “AZO continues to see strength in DIFM with domestic commercial up 15.5% in Q3. Mgmt also indicated that both DIY and DIFM gained mkt share in Q3.” “We think AZO’s share gains in Commercial and Retail, strong value offering from prudent inventory mgmt, improving margins, and strong share repurchase program will enable the company to beat consensus earnings expectations over the next year, which should drive the stock valuation higher,” the analysts add. Citigroup has raised its EPS estimates for FY10 from $14.12 to $14.73 to “reflect the EPS beat in Q3 and higher sales assumptions.” The analysts also raised their EPS estimates for FY11 from $16.01 to $17.08 due “to higher sales growth and margin assumptions.” More Analyst Ratings here