AutoZone, Inc. (NYSE:AZO) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of US$2.8b arriving 5.2% ahead of forecasts. Statutory earnings per share (EPS) were US$14.39, 6.0% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 21 analysts covering AutoZone are now predicting revenues of US$12.5b in 2021. If met, this would reflect a credible 3.7% improvement in sales compared to the last 12 months. Per-share earnings are expected to rise 6.5% to US$69.82. Before this earnings report, the analysts had been forecasting revenues of US$12.5b and earnings per share (EPS) of US$69.85 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$1,241, showing that the business is executing well and in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values AutoZone at US$1,415 per share, while the most bearish prices it at US$1,050. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 3.7%, in line with its 3.6% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.3% per year. So although AutoZone is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for AutoZone going out to 2022, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with AutoZone .
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.