11:06 AM EDT, 05/21/2025 (MT Newswires) -- AutoZone's ( AZO ) continued strategic investments are expected to position it for long-term outperformance, BofA Securities said in a report Wednesday.

BofA emphasized AutoZone's ( AZO ) consistent performance in both the do-it-yourself and pro segments, noting continued share gains and investments in labor and infrastructure. The expansion of the company's commercial programs -- now in 92% of stores -- and rollout of hubs and mega hubs are key drivers of future growth, BofA said.

The brokerage upgraded AutoZone ( AZO ) to buy from neutral and raised its price objective to $4,800 from $3,900, citing the auto parts retailer's recession resilience, market share gains, and favorable industry dynamics, the report said.

AutoZone ( AZO ) is set to report Q3 results on Tuesday, with BofA projecting EPS of $38.15, above the $36.80 consensus, with domestic comparable sales growth of 2%. The firm cited stronger-than-expected data from Bloomberg Second Measure and robust March sales activity, likely boosted by favorable tax refunds, the report said.

BofA also said it sees "opportunities for a return to 2%-4% industry inflation" and believes the auto aftermarket could benefit. Strategic investments are expected to drive share gains, with the company potentially gaining "disproportionate share from [advance auto parts] store closures," the report said.

BofA estimates about one-third of AutoZone's ( AZO ) costs are exposed to Chinese imports but expects the company to pass these costs to consumers, who are more likely to repair existing vehicles than buy new ones.

Price: 3870.35, Change: -9.80, Percent Change: -0.25