AutoZone, Inc. Should Have Been Better but Doesn’t Mean It Won’t Be Okay; Need A Little Comp Breathing Room

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AutoZone, Inc. Should Have Been Better but Doesn’t Mean It Won’t Be Okay; Need A Little Comp Breathing Room

Christopher Horvers, CFA AC North America Equity Research

(1-212) 622-1316 27 May 2026 J P M O R G A N

christopher.horvers@jpmorgan.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

Our thesis is based on AZO’s leadership in DIY, share potential

in DIFM, and consistent margin and earnings performance, with

the latter driven by the compounding of EBITDA growth to

maintain leverage levels and fuel share repurchases. Moreover,

AZO is in one of the best industries in retail (low AMZN risk,

failure and maintenance-driven demand), which currently has

favorable fundamentals (car parc, gas prices, pricing).

Valuation

Our December 2026 price target of $3,850 is based on ~22x P/E

YTD 1m 3m 12m

Abs -8.6% -13.4% -15.3% -19.0% on our FY27 estimates, ahead of the stock’s historical average

Rel -18.4% -18.3% -24.1% -46.0% and where it currently trades on FY26e given temporarily

depressed earnings (LIFO a ~$10 EPS headwind in FY26e) butCompany Data

warranted, in our view, given somewhat persistent inflation

Shares O/S (mn) 20

52-week range ($) 4,388.11-3,001.00 (energy, resin, steel), self-help on the share front, deferred

Market cap ($ mn) 60,901.66 maintenance (as expressed in below normal transaction comps

Exchange rate 1.00 yielding easy comparisons), persistent wage growth, AZO

Free float (%) 99.7%

3M ADV (mn) 0.20 making further progress on it DIFM initiatives, and time portend

3M ADV ($ mn) 709.1 the ability to continue to comp.

Volatility (90 Day) 34

Index S&P 500

BBG ANR (Buy | Hold | Sell) 23|6|0 Performance Drivers

Key Metrics (FYE Aug)

$ in millions FY25A FY26E FY27E FY28E

Financial Estimates

Revenue 18,939 20,429 21,782 23,141

Adj.