12 Best Consumer Cyclical Stocks to Buy According to Analysts

10. AutoZone, Inc. (NYSE:AZO)

Number of Hedge Fund Holders: 60

Average Upside Potential as of November 28: 15.8%

AutoZone, Inc. (NYSE:AZO) is one of the largest aftermarket auto parts distributors in America. The firm has more than 7,000 stores globally, with the bulk of these located in the US.

As of November 28, 19 out of 27 analysts had a Buy rating for AutoZone, Inc. (NYSE:AZO)’s shares, while four had a Strong Buy rating. The average share price target was $4,579.13.

One recent analyst action for AutoZone, Inc. (NYSE:AZO)’s shares came on November 13th when Goldman Sachs upgraded the stock to Buy from Neutral and increased the share price target to $4,262 from $4,090. As part of its coverage, the bank cited AutoZone, Inc. (NYSE:AZO)’s scale advantages over other retailers and noted the strong performance of the firm’s do-it-yourself market. AutoZone, Inc. (NYSE:AZO)’s scale tied into the strong DIY performance as the firm’s extensive presence allowed it to grow its market share, according to the bank.

The analyst upgrade came after AutoZone, Inc. (NYSE:AZO)’s fiscal fourth-quarter earnings. As part of the results, the retailer outlined that its domestic DIY same-store sales grew by 2.2%. During the earnings call, CFO Jamere Jackson also commented that AutoZone, Inc. (NYSE:AZO) was gaining domestic DIY market share. Yet, at the same time, CEO Philip Daniele, while responding to a question from Jefferies’ Bret Jordan about discretionary merchandise segments, tied DIY sales to lower-income consumers:

“At some point, you know, it really spiked up, and I’m going back several years, you know, coming out of the pandemic, the discretionary categories really spiked up. And then they’ve really declined over the last two years. As we said, it’s the best growth we’ve had over the last couple of months since ’23. So I’d say it’s probably bottomed out and slowly started to gain some traction. There’s a little bit of green shoots, but I would say it’s a little early to say. I still think that, you know, the lower-end consumer is still under quite a bit of pressure. And, you know, this is mostly on the DIY sales floor side of the business.”