AutoZone has been on a tear since November 2009 -- rising at a 45-degree angle on its chart from $135 to $200. Whenever the overall market has pulled back, AutoZone has withstood the bearish pressure and moved higher.
Now, the stock is going to face some stiff resistance at $200, but most analysts believe AutoZone will make short work of that price point. Barclays Capital has set a price target for AutoZone at $210, UBS and Morgan Joseph have set their target at $215 and Argus has set its target at $234.
I'm watching for AutoZone to test resistance for just a little bit before breaking up and through.
Analyst Expectations: Looking ahead to next quarter's earnings announcement, analysts expect AutoZone to earn $14.62 per share -- which is a whopping $10.14 more than the company made during the same quarter last year.
Fundamental Analysis: AutoZone has a stellar fundamental outlook -- based on the return on equity (ROE) the company is providing and the stock's PEG ratio.
AutoZone has an ROE of 551.28%. When you compare that to Advance Auto Part's (AAP) ROE of 22.68% and Pep Boys' (PBY) ROE of 5.45% -- two other stocks in the Auto Parts Stores industry -- you can see that AutoZone is providing an amazing return to its owners.
AutoZone has a PEG ratio of 1.16 -- which is a little low compared to the industry average of 1.20. Typically, a PEG ratio less than 1 is a sign the stock price is not overvalued. But even though AutoZone's PEG is higher than 1, it still appears to be undervalued compared to other stocks in its industry.
Technical Analysis: AutoZone has gained 5.92% during the past month and is currently trading above its 20-day, 50-day and 200-day moving averages.
Disclosure: Hansen does not own shares of the stocks discussed above. Positions can change without notice.