Third-Quarter Earnings, Wage Hikes Soften Our Near-Term Outlook for AutoZone, but Shares Still Cheap
Our $790 per share valuation for narrow-moat AutoZone should see a mid-single-digit percentage dip after it posted third-quarter earnings that lag our full-year profitability target. Still, we believe sentiment is overly fixated on near-term results that are affected by weather-related volatility. Our long-term targets, calling for 4% top-line growth against high-teens adjusted operating margins over the next decade, remain intact.Year to date, AutoZone reported 4% revenue growth and an 18% adj...
AutoZone is a retailer and a distributor of automotive replacement parts and accessories. The company operates stores in the United States, including Puerto Rico and Saint Thomas, Mexico, and Brazil. Each store carries a product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories and non-automotive products. In addition, the company has a commercial sales program that provides commercial credit and delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts. The company also sells the ALLDATA brand automotive diagnostic and repair software.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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