- Ankur Jaswal - Aaron Baumann - Lilly Li

Company Profile
Company Profile

Started under the name Auto Shack Inc. in Forrest

Industry Analysis

City, Arkansas in 1979

Key Statistics Technical Analysis SWOT Analysis Recommendation

Changed name to AutoZone in 1987

AutoZone IPOd in 1991 on the NYSE

Largest uto parts retailer with 4,534 stores in the US and Puerto Rico Nations leading retailer and distributor of automotive parts

Company Profile
Company Profile Industry Analysis Key Statistics

Autozone sells new and remanufactured hard parts,

maintenance items and accessories for most cars, trucks, and SUVs

Technical Analysis SWOT Analysis Recommendation

Also sells its computer-based automotive diagnostic

and repair guide ALLDATA to professional mechanics Primarily caters to DIY customer, though currently expanding to the commercial markets

Industry Analysis
Name
Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis Recommendation

Market Cap

P/E Ratio

Net Profit Margin

Quarterly Rev. Growth 8.1%

Autozone (AZO) OReilly Automotive (ORLY) Advanced Auto Parts (AAP) Pep Boys (PBY)

$12.80B

16.48

11.41

$9.67B

21.69

9.67

7.7%

$4.91B

14.24

7.21

4.2%

$572.57M

14.32

2.67

3.5%

Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis Recommendation

Price: $325 Market Cap(mm): 14,552.1 Enterprise Value: 16,845 Average Daily Volume: 401,203 Net Cash/Share: $2.32 EPS (Net) 2010A Q1 $2.82 Q2 2.43 Q3 4.12 Q4 5.66 FY Aug $14.90A 2011A 3.77 3.34 5.29 7.18 $19.41A 2012E 4.31 3.68 6.09 7.69 $ 21.62

*All Estimates are calculated from Stifel Nicolaus models.

Introducing the PEG Ratio. Widely used indicator of a stocks potential value. Valued more over price/earnings ratio because it also accounts for GROWTH. = (P/E) / (Annual EPS Growth) AAP: .98 ORLY: 1.26 AZO: .98 ORLY is OVERVALUED in the sector.

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Analysis Behind Estimates

Raised 1Q12 estimates from $4.05 to $4.31. (4.33 Street estimates). Driven by +2% comp sales, +2.5% YOY SG&A per foot (vs. +2.9% y/y prior). AZO repurchased $433 mm worth of stock in 4Q11. (1.5 mm shares). Management believes it is early innings for AZOs internet platform. Leveraging the internet for online ordering is a primary focus for FY12. (Improving their biggest weakness WEBSITE DESIGN)

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-Take a look at the top-line on the financials

Continuous Stock Repurchases

Not as great as dividend (no yield support); however, company has one of the most buybacks on the street. Stock Repurchase (BUYBACK) is when a company purchase its OWN shares and removes them from the market. In terms of Supply and Demand for the company, there less supply of stock. 11 Billion in stock repurchases since 1998. Recently announced 750 mm buyback

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IPO in 1991 - $23 / Share

-Considered overvalued at IPO dated

COMPETITORS 1 YEAR AAP vs ORLY

Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis Recommendation

Now take a look at AZO 1 Year

Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis Recommendation

Now take a look at AZO 1 Year

Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis Recommendation

Euro-Crisis

Relative Strength Index

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Williams % R

Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis Recommendation

SWOT Analysis Strengths

Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis Recommendation

Market share leader with over 4,600 stores nation wide Profit margins increasing from 50.5% to 51.2% through house-brands Stock repurchase of 1.5 million shares Strong store management and training programs helps keep a competitive advantage Loyal customers

SWOT Analysis Weaknesses

Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis Recommendation

High staff turnover causes unstable customer experience Slow, but positive expansion Web 1.0 website: though easy to navigate, basic looks with little digital strategy in mind

SWOT Analysis Opportunities

Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis Recommendation

Upgrade to Web 2.0 through redesign of website Create new market and services for older cars Expand parts holdings to more European makes Decrease in auto sales means less people are buying new cars Recession brings out the DIYer

SWOT Analysis Threats

Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis

Due to higher fuel costs, consumers are putting less miles on cars Government offering new car subsidy programs Competition from Pep Boys, Advanced Auto Parts, and big box stores (Wal-Mart, Costco)

Recommendation

Holiday Spending Outlook

According to the NRF consumers plan to spend an 2.1% less than last year and this estimate is expected to hurt retailers. Notable Increase in online spending YOY. An overall WEAK outlook for 4Q11. AZO is the best name going into the holiday season! -With our concerns about the broader macro environment over the near term (decrease in holiday spending and Europe) a low discretionary name as AZO has a lot of downside protection. -Only 17% of AZOs annual EPS comes from 4Q (holiday season). -Best retail stock.

Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis Recommendation