TD Cowen has reaffirmed a Buy rating on AutoZone Inc. and maintained a $4,400 price target, pointing to continued expansion of the retailer's footprint in the do-it-for-me (DIFM) channel. The firm still expects AutoZone to gain DIFM market share, even as it trimmed near-term estimates to reflect timing headwinds from winter storms that hit late in the second quarter.
The shares trade at $3,831.61, representing a market capitalization of $63.5 billion and a 10.5% gain so far this year. However, analysis suggests the stock may be trading above its Fair Value estimate.
TD Cowen described the setup ahead of AutoZone's earnings report on March 3 as mixed. The firm pointed to the company's strong year-to-date stock performance and flagged likely renewed investor concerns about pricing in the wake of tariff changes. Those dynamics informed its decision to lower near-term estimates even while remaining constructive on the company's market position.
Despite the more cautious near-term view, TD Cowen remains positive on AutoZone's medium- and long-term share opportunity. The analyst expects margin pressure to ease in coming quarters and views the company as structurally stronger following years of strategic investment. These investments, TD Cowen argues, have placed the retailer ahead of a fragmented wholesale distributor peer group as several public operators continue to work through turnarounds.
Research notes highlight AutoZone as a prominent Specialty Retail operator that has stayed profitable over the last twelve months and reported a gross profit margin of 52%.
TD Cowen's share-tracking estimates show a pattern of steady DIFM gains: the firm estimates year-over-year increases in DIFM market share of 23 basis points, 28 basis points, and 32 basis points in the last three reported quarters. Its second-quarter 2026 projection would imply roughly a 30 basis point year-over-year gain.
Recent results and analyst reactions
AutoZone's first-quarter fiscal 2026 results reported earnings per share of $31.04, below the consensus expectation of $32.71. The company attributed the shortfall in part to higher expenses tied to store growth and a decline in gross margins largely associated with LIFO accounting, which drove a 271 basis point reduction in margins.
Following the earnings announcement, several brokerages adjusted their price targets and reiterated views:
- UBS trimmed its price target to $4,325.00 while maintaining a Buy rating, citing higher investment spending.
- Jefferies lowered its target to $4,400.00, noting the EPS shortfall.
- Truist Securities set a new target of $4,076.00, pointing to the combined effect of LIFO charges and elevated SG&A.
- BMO Capital lowered its target to $4,400.00, highlighting higher SG&A spending as a concern.
- DA Davidson reiterated a Buy stance with a $4,500.00 price target, signaling continued confidence among some analysts.
What this means for investors
TD Cowen's reaffirmation of a Buy rating underscores conviction in AutoZone's DIFM growth and the payoff from multi-year investments in the business. At the same time, the combination of a recent earnings miss, elevated expense items, tariff-related pricing concerns and winter-storm timing effects has prompted analysts to lower near-term estimates and re-price targets across the sell-side.
Investors should weigh the company's ongoing market share momentum against margin compression in the most recent quarter and the potential for further short-term volatility ahead of earnings and as pricing dynamics evolve.