This post was originally published on this site
https://i-invdn-com.investing.com/news/LYNXNPEB901Y4_M.jpg
Analysts told investors in a note that AZO currently appears mispriced relative to its commercial opportunity. “We upgrade AZO from Neutral to Buy as we think the current valuation has created an attractive buying opportunity,” wrote the analysts.
“The multiple has compressed in response to the perception that AZO’s commercial prospects have dimmed and the fear that the sector will see more price competition,” they added.
They stated that as AZO shows evidence it can successfully navigate through these risks, its shares could rally.
“Over time, we believe AZO’s DIFM growth will re-accelerate while its DIY growth will be steady amid the uncertain macro backdrop. Ultimately, this should influence a return to a premium valuation multiple of 19x. Thus, we see ~30% potential upside to the current price & favorable 2.7:1 upside/ downside skew,” they concluded.
