From Financial Modeling Prep: 2024-10-14 15:44:00

Goldman Sachs analysts downgraded AutoZone (NYSE:AZO) to Sell from Neutral, with a new price target of $2,917, down from $3,205. The shift reflects a move towards companies with stronger growth potential in discretionary goods as interest rates stabilize and consumer spending diversifies.

Concerns about AutoZone’s outlook include strain on lower-income consumers, who make up a significant portion of its customer base. Analysts predict financial pressure on this demographic through 2025, along with a potential decrease in repair demand as car prices normalize.

Customer sentiment metrics for AutoZone have declined, with NPS and NPI scores nearing three-year lows. Goldman Sachs also highlights potential financial strain as the company faces upcoming 2025 debt obligations, raising concerns about interest expenses and stock buybacks.

Goldman Sachs finds AutoZone’s valuation to be elevated, making it difficult to justify amid slower growth and increased risks in the market.



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