TD Cowen reduced its price target for AutoZone to $3,500 from $3,700 while maintaining a buy rating, citing headwinds in the do-it-yourself (DIY) automotive segment. The firm trimmed its fourth-quarter domestic comparable sales estimate to 2.5%, below market expectations of 2.7% to 3.0%. AutoZone derives 66% of its revenue from DIY sales, which have been pressured by adverse weather conditions and reduced discretionary spending among lower-income consumers.
The stock, trading at $2,976 near its 52-week low of $2,902, has declined 13% year-to-date. TD Cowen also noted a compression in the company’s valuation multiple from 21 times in January to 17 times currently. AutoZone’s board has authorized an additional $1.5 billion in share buybacks, bringing the total repurchase program to $42.2 billion since its inception in 1998.
Mavis Tire Express Services agreed to acquire Pep Boys from Icahn Enterprises for approximately $700 million in cash, expanding Mavis’s service center network to over 4,400 locations across North America. Separately, Barclays highlighted potential regulatory scrutiny for a rumored O’Reilly Automotive acquisition of Genuine Parts’ automotive business, valued at over $10 billion, due to potential overlap with NAPA stores.
The analyst adjustment follows broader concerns over DIY segment stability, with TD Cowen’s revised estimate including 0.3% growth in DIY and 7.0% in DIFM (
