The auto parts company said it would add 20,000 employees in the U.S. to meet growing retail demand
The shares of AutoZone, Inc. (NYSE: AZO) are up 0.9% at $1,197.75 this morning, after the company announced it would add over 20,000 employees in the U.S. to meet growing demand. Car sales have been slowly increasing since April, leading automakers to ramp up production to boost dealerships inventories. In turn, maintenance stores are seeing an uptick in demand as well. Soon after, D.A. Davidson initiated coverage with a "buy" rating and $1,380 price target.
On the charts, the security has mostly recovered from its late-March lows near the $693 level. Almost in coordination with auto sales, shares have been on a steady climb since April, with support from the 50-day moving average over the last couple of months. And while overhead pressure at the $1,200 mark has kept a tight lid the security in recent weeks, the stock is not far off from its all-time-high of $1,271.90 on December 10. Year-over-year, AZO sports a 9.6% lead.
Analysts were mostly optimistic toward the equity coming into today, with eight of the 13 in coverage sporting a "buy" or better recommendation, while the remaining five carried a tepid "hold." Meanwhile, the 12-month consensus price target of $1,275.87 is a 7.5% premium to current levels.
That optimistic sentiment is echoed in the options pits, where calls are more popular. The stock sports a 10-day call/put volume ratio of 1.24 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 81st percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late.