AutoZone and O'Reilly Automotive to Open Near 52-Week Highs

At the end of last week, auto parts and accessories retailers AutoZone AZO and O'Reilly Automotive ORLY reached new multiyear highs of $332.93 and $71.70 per share, respectively. AutoZone is expected to report this week that its fiscal fourth-quarter earnings rose 18.8% from a year ago while revenues grew 6.7%. Oppenheimer upgraded the stock to outperform about a month ago. The Memphis-based company has more than 4,500 stores throughout North America and also markets products through its website. AutoZone has a market cap of $13.8 billion. Per-share earnings are forecast to grow 15.5% over the next five years, which is better than the industry average. The forward earnings multiple is 14.9 and the PEG ratio is 1.1. AutoZone's share price is about 26% higher than six months ago. The stock has outperformed competitors Advance Auto Parts AAP and Genuine Parts GPC year to date. O'Reilly announced in August it would buy back an additional $500 million in shares, and last week it made a $300 million note offering. O'Reilly also recently paid a $20.9 million settlement related to a fraud probe of its CSK Auto subsidiary. Springfield, Mo.-based O'Reilly Automotive operates more than 3,600 stores and has a market cap of $9.7 billion. It was founded in 1957. The long-range EPS growth forecast is 16.5%, which leads the industry. The return on equity is 15.1%. O'Reilly's share price has risen more than 28% in the past six months and is about 37% higher than a year ago. The stock has also outperformed competitors Advance Auto Parts and Genuine Parts since the beginning of the year.