Nov. 13 at 5:56 PM
Goldman Sachs upgraded AutoZone from Neutral to Buy and Genuine Parts from Sell to Neutral in a note published Thursday, citing improved risk/reward profiles for both auto parts retailers following recent market moves.
Analyst Kate McShane said the bank now sees “a more attractive risk/reward setup after the recent pullback” in AutoZone shares and expects the company’s domestic Do-It-For-Me (DIFM) business to keep gaining market share, while softness in Do-It-Yourself (DIY) demand is likely temporary.
Goldman noted AutoZone shares have fallen 13% since September 11, compared with a 4% gain in the S&P 500, creating what it views as an appealing entry point. “We are upgrading AZO to Buy from Neutral as we see an attractive risk/reward opportunity following the recent decline,” the firm wrote, adding that AutoZone’s strength in the DIFM market should offset weaker DIY trends.
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