11:55 AM EDT, 07/10/2024 (MT Newswires) -- AutoZone's ( AZO ) auto parts retail sector remains "relatively attractive" despite a soft environment for discretionary spending, Wedbush said in a note Wednesday.

Wedbush held investor meetings with AutoZone's ( AZO ) top executives including Chief Executive Phil Daniele, Chief Financial Officer Jameer Jackson, Chief Operating Officer Tom Newbern, and Vice President Tax, Treasury, and Investor Relations Brian Campbell, it said, adding that following these discussions, its outlook on AutoZone ( AZO ) has become more positive.

"The June heat wave likely provided a boost to comps that some short-term-oriented investors want to fade, but we see a resilient [Do it yourself] business and improving Commercial business that put the company on track to at least meet near-term domestic comp expectations," Wedbush said.

Margins are poised to hold or expand, despite anticipated challenges like last in, first out headwinds and competitive pressures, Wedbush said, adding that international sales are robust, with expansion plans in Mexico.

Wedbush reiterated its outperform rating on AutoZone ( AZO ) with a price target of $3,200.

Price: 2826.86, Change: +9.80, Percent Change: +0.35