AutoZone Facing Potential Headwinds From Tariffs, SG&A Investments, Morgan Stanley Says

MT Newswires Live12-03

AutoZone (AZO) is facing potential headwinds from tariffs and its investments in selling, general, and administrative expenses, but could still benefit from secular industry tailwinds, Morgan Stanley said in a Tuesday note.

Ahead of the company's release of its fiscal Q1 results on Dec. 9, Morgan Stanley said it expects "relatively in-line" earnings per share, weighed down by last-in, first-out charges and headwinds from a higher commercial mix.

Fiscal Q1 comparable sales, meanwhile, are expected to top expectations, driven by tariff-related price increases and domestic growth of the company's retail and commercial segments, the investment firm added.

Morgan Stanley also flagged potential deceleration of domestic comparable sales throughout fiscal 2026 and the continued impact of LIFO charges on the company's profitability.

Morgan Stanley reiterated its overweight rating on AutoZone, with a $4,700 price target.

Price: 3829.15, Change: -117.84, Percent Change: -2.99

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