10:45 AM EDT, 05/27/2025 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our 12-month target by $25 to $4,200, based on a FY 26 P/E of 24.5x, a justified premium to AZO's historic average multiples. We lower our EPS estimates to $148.25 from $152.10 for FY 25 and to $171.10 from $172.50 for FY 26. AZO posted May-Q adjusted EPS of $35.36 vs. $36.69 (-4%), short of the $37.01 consensus. The miss was driven by weaker-than-expected margins. Revenue rose 5.4% to $4.46B on a 5.0% increase in domestic comp store sales (240 bps ahead of consensus), but gross margin contracted 80 bps to 52.7% (70 bps below consensus). The big story was the surge in AZO's domestic comp store sales, which rose by its strongest rate since late 2022. Management credited its same-store sales growth initiatives and improved net inventory metrics for the improvement. We were encouraged by management's optimistic tone, as the company guided for gross margin improvement as its new distribution centers ramp up and it continues to drive higher merchandise margins. We reiterate our Buy opinion on AZO.