AZO
AutoZone, Inc.
$3,406.50
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 16.3% above fair value
You pay
$3,406.50
Bear
$2,562.60
Fair
$2,928.68
Bull
$3,294.77
Bear
$2,562.60
-24.8%
$144.87 × 14x P/E
Fair
$2,928.68
-14.0%
$144.87 × 16x P/E
Bull
$3,294.77
-3.3%
$144.87 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
23.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $4235.71 from 45 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $2928.68 per share.
Warnings
Wall Street's average price target is $4235.71 (from 45 analysts). Our estimate is 44% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples