10:28 AM EDT, 09/24/2025 (MT Newswires) -- AutoZone ( AZO ) is well-positioned to keep growing sales and market share despite near-term margin pressure from last-in, first-out or LIFO, charges, Morgan Stanley said in a report Wednesday.

Analysts at Morgan Stanley raised their price target for AutoZone ( AZO ) to $4,700 from $4,000, citing accelerating sales momentum and resilient margins despite near-term headwinds and reiterated its overweight rating, calling the auto parts retailer a "quality earnings compounder" with expected earnings per share growth of about 11% from fiscal 2025 to 2029, the report said.

Fiscal Q4 results showed domestic same-store sales up 4.8%, driven by a 12.5% year-over-year increase in commercial sales and steady 2.2% do it yourself growth. Same-stock keeping unit pricing rose about 3% from roughly 1% in prior quarters, while merchandise margins improved by 30 basis points year over year despite an $80 million non-cash LIFO charge tied to tariffs, Morgan Stanley said.

The firm projects domestic comparable sales growth of about 5% in the next fiscal year, up from 3% previously, while short-term Earnings Before Interest and Taxes margin pressure from LIFO charges is expected to normalize and stabilize around the mid-18% range by fiscal 2027, the report said.

Price: 4096.37, Change: -23.63, Percent Change: -0.57