8 Best Auto Parts Stocks According to Hedge Funds

1. AutoZone Inc (NYSE:AZO)

Number of Hedge Fund Holders: 60

AutoZone Inc (NYSE:AZO) is one of the best Auto Parts stocks according to Hedge Funds.

On December 18, Christopher Horvers from JPMorgan maintained his Overweight rating on AutoZone Inc (NYSE:AZO), cutting down his price target estimate from $4,850 to $4,100 in the process. His revised target now leads to an upside potential of almost 11% at the current level.

Horvers kept his bullish outlook on AutoZone Inc (NYSE:AZO), even after the company’s weaker-than-expected sales figures reported for the fourth quarter. He also emphasized management’s ambitions to extend resources towards the acceleration of store growth, which he expects will persist longer than previously anticipated. Despite identifying some weather-related headwinds, given the company’s two polar vortexes, Horvers still remains positive on the company’s prospects.

Back on December 16, Wolfe Research analyst Spencer Hanus had downgraded his rating on AutoZone Inc (NYSE:AZO) from Outperform to Peer Perform.

However, the broader sentiment for the stock remains strongly bullish. It has received Buy ratings from 17 of the 20 analysts covering it as of the December 29 close. The stock offers a consensus upside of over 16%, based on a median 1-year target price of $4,282.

AutoZone Inc (NYSE:AZO) operates retail stores and a distribution network for automotive replacement parts, non-automotive products, accessories, and maintenance items. It offers products for cars, utility vehicles, light trucks, and vans, serving both DIY customers and commercial repair centers. The company manages a high-volume supply chain network for its private brands such as Duralast.

While we acknowledge the potential of AZO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AZO and that has 100x upside potential, check out our report about the cheapest AI stock.

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