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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
AZO — frequently asked questions
Is AutoZone Inc. overvalued?
In our latest published analysis dated 2026-10-02, AZO screens modestly overvalued. The price recorded at analysis is USD 2,792 versus our fair value of USD 2,636; the high endpoint is presented separately as potential value of USD 3,972. That implies roughly 5.6% downside to fair value at that date.
Our latest published report, analyzed 2026-10-02, gives AZO a fair value of USD 2,636 and a potential value of USD 3,972. The conclusion is triangulated across multiple valuation models and weighted by reliability for AutoZone Inc.'s archetype; it is a dated research output, not a live price.
Should I buy AZO now?
Our latest published rating for AZO, analyzed 2026-10-02, is Hold. AutoZone Inc. screens modestly overvalued at the analysis-date price of USD 2,792 versus fair value of USD 2,636; potential value is USD 3,972. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for AZO?
The dedicated bear-case section in our report analyzed 2026-10-02 documents AutoZone Inc.'s material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is AZO's rating?
Our latest published rating for AZO, analyzed 2026-10-02, is Hold, with a published moat assessment of 8/10 (Narrow). It reflects our fair value of USD 2,636, the potential value of USD 3,972, and the price recorded at analysis (USD 2,792).
AutoZone's multi-year supply chain buildout of regional mega-hubs carrying 80,000 to 100,000 SKUs enables accelerated commercial DIFM market share gains toward peer O'Reilly Automotive while sustaining DIY gross margins (52.34% in FY2026).
Main risk
Persistent high benchmark interest rates with the 10-year Treasury yield at 5.26% triggering an increase in refinancing yields above 12% across upcoming debt maturities.
AutoZone is rated Hold, as its report-date price of $2,792.03 as of October 2, 2026 sits at a 5.92% premium to our fundamental Fair value of $2,635.86, balancing high balance sheet leverage against robust aftermarket profitability.4
We maintain a Hold rating on AutoZone Inc.. For an investor, this recommendation indicates that current shareholders should preserve their existing holdings while prospective buyers should wait for a more attractive entry valuation, as the equity price fairly reflects ongoing operational strengths alongside near-term balance sheet risks.
The report was prepared at a price of $2,792.03 on October 2, 2026. This report-date price trades at a 5.92% premium to our Fair value of $2,635.86, which represents an implied return of -5.59%. If commercial distribution expansion accelerates market share gains while supply chain capital expenditures moderate, AutoZone offers a Potential value of $3,971.65.4
The primary risk that would alter our view is rising debt refinancing costs coupled with persistent logistics capital intensity. AutoZone carries $12,447.44M in total debt against $326.12M in cash, with $1,598.60M maturing within one year and pre-tax cost of debt at 19.80%. If benchmark interest rates remain elevated near 5.26% while mega-hub capex continues to exceed 2.0 times depreciation, debt service would escalate, forcing management to curtail share repurchases and dampening per-share earnings growth.2,4,6
The primary driver that could unlock value is AutoZone's mega-hub logistics deployment and subsequent capital expenditure normalization. By providing local commercial accounts with same-day access to 80,000 to 100,000 parts, AutoZone expands commercial sales while defending a 52.34% gross profit margin. Once automation across distribution centers matures and capital expenditures step down from FY2025 levels of $1,327.26M toward maintenance levels, free cash flow conversion would surpass $2.5B annually, fueling accretive share buybacks that could drive the stock toward our Potential value of $3,971.65.4,6
AutoZone's multi-year investment cycle elevated capex to $1,327.26M in FY2025 to create a nationwide network of 80,000 to 100,000 SKU mega-hubs. As construction and automation peak, capital intensity is expected to taper toward maintenance capex (~55% of peak capex), unlocking substantial free cash flow expansion beyond $2.5B.6
AutoZone delivered an 18.31% operating margin on $20,338.56M in revenue in FY2026, underpinned by a 52.34% gross profit margin. The rational aftermarket parts duopoly with O'Reilly Automotive protects profitability against cyclical pressures common among OEM suppliers.
House recommendation
AutoZone is rated Hold because the report-date price of $2,792.03 trades at a 5.92% premium to our fundamental Fair value of $2,635.86, balancing commercial distribution expansion against $12.45B in debt obligations.4
Company overview
Z-net provides parts information based on year, make, model and engine type of a vehicle and also tracks inventory availability at the store, at other nearby stores and through special order. The Z-net display screens are placed on the hard parts counter or pods, where both the AutoZoner and customer can view the screen. AUTOZONE INC designs and build stores for high visual impact.
The typical store utilizes colorful exterior and interior signage, exposed beams and ductwork, finished floors and brightly lit interiors. Batteries, maintenance products, accessories and non-automotive items are attractively displayed for easy browsing by customers.
In a severe stress test combining sustained capital intensity, commercial margin erosion, and debt refinancing pressures, AutoZone faces significant cash flow compression. If distribution mega-hub capital expenditures remain elevated above 2.0x D&A while commercial price concessions compress operating margins toward 17.0%, consolidated operating profit contracts substantially. Concurrently, refinancing $1,598.60M in debt maturing within one year under benchmark risk-free rates of 5.26% against total debt of $12,447.44M increases annual interest expense significantly. This dynamic would force a complete suspension of share repurchases ($1,578.19M in FY2025), eliminating EPS accretion and anchoring fundamental valuation at the bear valuation endpoint of $2,124.23.
AutoZone possesses a narrow competitive moat underpinned by its extensive retail store network, proprietary cataloging data, and an accelerating mega-hub supply chain deployment that creates significant barriers to entry in automotive aftermarket parts retailing. The automotive aftermarket is characterized by need-it-now consumer demand, where commercial mechanics and DIY vehicle owners prioritize immediate parts availability over minor price differentials. AutoZone's hub-and-spoke infrastructure connects local satellite stores to regional mega-hubs carrying 80,000 to 100,000 unique SKUs, enabling multiple daily parts deliveries and same-day commercial repair fulfillment.
This structural distribution advantage enables AutoZone to generate pricing power and superior profitability compared to the broader automotive industry. In FY2026, the company generated $10,644.97M in gross profit (52.34% gross margin) and $3,723.31M in operating income (18.31% operating margin) on $20,338.56M of . This compares favorably to automotive component manufacturers like Aptiv (12.68% operating margin) and BorgWarner (10.64%), reflecting the rational duopoly dynamics shared with primary peer O'Reilly Automotive (20.15% operating margin).
The highlighted cell is Fair value when every assumption sits at its base level ($2,635.86). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $2.3B after modeled reinvestment of $892.8M, with terminal value at 76.4% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to , reinvestment, or resets materially.
Upgrade the rating; Verify commercial customer acquisition density, confirm distribution automation milestones, and monitor working capital absorption across regional hubs.
Trigger: Consolidated comparable store sales growth accelerates above consensus expectations driven by commercial DIFM market share gains, while operating margins expand sequentially and mega-hub logistics deliver immediate delivery route efficiencies.
Accelerating commercial sales growth and immediate delivery route efficiencies would demonstrate that mega-hub investments are expanding market share without diluting margins, justifying an upgraded stance toward $3,971.65.
In-line
Maintain Hold; Maintain existing neutral portfolio allocation, track progress on mega-hub construction, and observe upcoming debt maturity refinancing terms.
Trigger: Quarterly revenue growth and diluted earnings per share meet published expectations, with operating profit margins holding stable as DIY retail pricing discipline offsets commercial delivery rollout investments.
AutoZone's capital expenditures grew from $796.66M in FY2023 to $1,072.70M in FY2024 and $1,327.26M in FY2025, representing 7.01% of revenue and 2.16x depreciation. This compares to the industry benchmark capex-to-revenue ratio of 2.00% and capex-to-depreciation ratio of 1.45x. Broader industry capacity and supply lead-time metrics remain evidence-limited.6
Bull cycle
The automotive aftermarket industry benefits from persistent structural tailwinds, primarily the aging United States vehicle fleet and growing cumulative vehicle miles driven. As vehicles age, repair frequency and parts replacement requirements increase inelastically. In an expansionary cycle, commercial repair volume expands alongside steady retail DIY traffic, allowing market leaders with superior parts availability to pass through component inflation and gain commercial market share.
Bear cycle
A cyclical downturn would emerge if sustained macroeconomic pressure on lower-income consumers leads to deferred non-critical vehicle maintenance, while heightened price drives commercial repair shops to demand wholesale discounting. In such an environment, duplicated commercial delivery routes and fixed mega-hub logistics overhead would compress retail toward OEM supplier levels.
§11 Position management
Sizing
2-3%
AutoZone warrants a moderate conviction Hold rating based on a synthesized Fair value of $2,635.86 compared to the analysis price of $2,792.03, indicating a slight price premium of 5.92% (-5.59% implied return). While AutoZone possesses an entrenched narrow moat with 18.31% operating margins, the lack of valuation discount combined with elevated balance sheet debt of $12,447.44M justifies maintaining existing portfolio weightings without deploying fresh capital.4
Risk
Portfolio risk management requires strict discipline around financial leverage and interest rate exposure. AutoZone carries $12,447.44M in total debt against $326.12M in cash, with $1,598.60M maturing within twelve months. Investors should cap position sizing at a neutral portfolio weighting (2-3%) and avoid adding exposure until shares offer an adequate margin of safety to fair value. Portfolio risk should be monitored through quarterly covenants, mega-hub capital spending run-rates, and Latin American currency fluctuations.
§12 Investor perspectives
Core Fundamental Investor
Hold
AutoZone maintains a durable competitive moat and exceptional return on invested capital (59.57%), supported by an 18.31% operating margin in FY2026. However, with the stock trading at $2,792.03, at a 5.92% premium to our Fair value of $2,635.86, risk-reward is balanced, justifying maintaining current positions.4
Income and Defensive Investor
Avoid
AutoZone pays no cash dividend and directs all excess cash flow into share repurchases ($1,578.19M in FY2025). With $12,447.44M in total debt and negative shareholders' equity, income-oriented investors should avoid the stock due to refinancing sensitivity and lack of income yield.
§14 Final recommendation
Action
Hold
We recommend holding AutoZone shares at the report-date price of $2,792.03, as current valuation represents a 5.92% premium to our Fair value of $2,635.86 and an implied return of -5.59%. While AutoZone's competitive moat generates strong operating profitability (18.31% operating margin in FY2026), substantial financial leverage with $12,447.44M in total debt and multi-year supply chain capital intensity balance the risk-reward equation.4
Investors should monitor upcoming quarters for confirmation of capital expenditure moderation toward maintenance levels (~55% of FY2025 capex of $1,327.26M) and commercial market share gains against O'Reilly Automotive. A valuation retracement toward our or faster conversion would provide a more favorable setup before committing new equity capital.
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Sources
The records this analysis drew on, as they stood when it was run.
Analyst consensusData covering 2026-11-30 to 2027-08-31 · Published 2026-09-24 · cited for 2 figuresCited in Bear case
Non-US revenue from Mexico and Brazil reached $2,267.11M in FY2025, representing 11.97% of consolidated sales. Accelerated store rollouts in fragmented international markets provide long-term volume gains independent of mature domestic DIY trends.6,7
Debt refinancing at higher benchmark yields absorbs excess liquidity
Share repurchase programs are suspended to preserve investment-grade balance sheet liquidity
In the downside scenario, persistent headwinds compress equity value. This path unfolds if aggressive commercial price competition and duplicated delivery routes erode operating margins, while elevated mega-hub capital expenditures fail to deliver anticipated commercial customer density. Under these conditions, free cash flow conversion remains depressed and higher benchmark interest rates elevate debt service on outstanding obligations, forcing management to curtail share repurchases. The thesis would be disconfirmed if commercial revenue growth outpaces delivery expenses and operating margins stabilize above defensive thresholds by FY2027.
Ways this thesis can break
Persistent High Benchmark Yields Trigger Spike in Debt Refinancing Costs and Credit Spread Expansion on $12.45B Total Debt
AutoZone carries $12,447.44M in total debt against only $326.12M in cash, with $1,598.60M maturing within one year. Pre-tax cost of debt is elevated at 19.80% alongside a benchmark 10-year risk-free rate of 5.26%, while heavy debt obligations constrain free cash flow conversion and financial flexibility. If refinancing rates surge by 200 bps, annual debt service increases substantially, forcing a curtailment of share repurchases ($1,578.19M in FY2025) and compressing equity value across all models.2,4,5
FV impact
-16.9%
Cost of capital 2 points higher
Trigger
Within 18 months
Commercial DIFM Price War with O'Reilly Automotive and Route Overcapacity Compresses Consolidated Operating Margin
AutoZone's operating margin has contracted from 20.49% in FY2024 to 19.06% in FY2025 and 18.31% in FY2026. Direct peer O'Reilly maintains a higher operating margin of 20.15% and faster top-line growth (8.10%). If aggressive commercial account bidding and duplicated delivery routes compress AutoZone's operating margin by 300 bps below 15.5% (down from the modeled 18.31%-18.40%), annual operating income falls by over $650M, destroying enterprise cash conversion.4
FV impact
-4.3%
Operating margin 3 points lower throughout
Trigger
Domestic DIY Demand Stagnation and Emerging Market FX Devaluation Decelerate Five-Year Top-Line Growth
United States revenue of $16,671.61M accounts for 88.03% of FY2025 sales, where recent post-earnings revisions have already cut FY2027 revenue estimates and Q1 FY2027 EPS by -6.12%. Concurrently, non-US revenue ($2,267.11M in FY2025) is vulnerable to Mexican Peso and Brazilian Real depreciation. If top-line growth decelerates 500 bps below modeled 7.34%/7.09% consensus levels to under 2.0% YoY, deleveraging stalls and fixed store overhead severely reduces net earnings.1,7
FV impact
-7%
Revenue and EPS growth 5 points lower for five years
Trigger
Within 24 months
Early-warning signals to monitor
The five developments that would weaken our investment case.
Non-US revenue contribution dropping below 10.00% signals international store expansion failure and currency devaluation headwinds across Mexico and Brazil, cutting multi-year top-line growth.
Operating income-to-interest expense falling below 5.00x indicates surging refinancing costs on $12,447.44M total debt, forcing management to terminate share buybacks to protect investment-grade credit access.
Current:7.88x
Alert if< 5.00x
05
gross_margin
Gross margin declining below 51.00% indicates loss of retail DIY pricing power or severe wholesale discounting in commercial accounts, undermining AutoZone's core cash generation engine.
The moat is constrained from a wide rating by intense route-level competition in the commercial 'do-it-for-me' (DIFM) segment. While AutoZone dominates retail DIY, O'Reilly maintains superior commercial route density and established professional account relationships. Expanding market share in commercial DIFM requires heavy capital investment in delivery fleets and mega-hub inventory depth, which exerts mild downward pressure on consolidated operating margins (moderating from 20.49% in FY2024 to 18.31% in FY2026). Nonetheless, the high cost of replicating local delivery networks ensures durable economic returns well above the cost of capital.
AutoZone generates exceptional economic profit, demonstrated by a latest return on invested capital of 59.57% that substantially exceeds its computed WACC of 10.03%. Operating profitability remains structurally superior to automotive sector benchmarks, with an FY2026 operating margin of 18.31% far outperforming OEM component suppliers such as Aptiv (12.68%), BorgWarner (10.64%), and General Motors (3.20%).2,3,4
8/ 10
Narrow
Sources of advantage
01Scale Advantage and Mega-Hub Distribution Logistics — AutoZone's multi-year supply chain transformation builds high-density mega-hubs carrying 80,000 to 100,000 SKUs that provide same-day parts availability to commercial repair shops and satellite retail stores, supported by capital expenditures of $1,327.26M in FY2025 and $1,072.70M in FY2024. Replicating this dedicated local distribution infrastructure requires billions in capital, securing an enduring logistics barrier.Wide
02Retail Store Network Density and DIY Brand Equity — AutoZone's domestic store footprint generated $16,671.61M in US sales in FY2025 and consolidated gross profit of $10,644.97M (52.34% gross margin) on $20,338.56M revenue in FY2026. High neighborhood store density and trusted DIY customer service insulate retail parts replacement demand from pure e-commerce penetration.Moderate
03International First-Mover Hub-and-Spoke Distribution Footprint — AutoZone has scaled its international store network to deliver $2,267.11M in FY2025 non-US revenue, representing 11.97% of total sales ($18,938.72M). Operating in fragmented markets across Mexico and Brazil provides early-mover advantages in commercial cataloging and localized inventory distribution.Moderate
Commercial DIFM route duplication and price competition from peer O'Reilly Automotive.
medium
12-24 months
AutoZone leverages its existing retail store network as dispatch nodes, utilizing proprietary cataloging software and mega-hub inventory depth to compete on fulfillment speed rather than discounting gross margins.4
Refinancing obligations on $12,447.44M total debt amid elevated benchmark yields (risk-free rate 5.26%).
medium
12-18 months
AutoZone produces over $3.1B in annual operating cash flow ($3,117.34M in FY2025) and can throttle share repurchases ($1,578.19M in FY2025) to allocate liquidity toward debt retirement.5,6
Currency depreciation and import tariff exposure across Latin American expansion markets in Mexico and Brazil.
low
24-36 months
Inelastic demand for replacement parts supports local currency price adjustments, while increased regional sourcing in Mexico mitigates dollar import exposure.7
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and at , then adjust for signed per current share.
Mid-single-digit consolidated revenue growth driven by commercial market share capture and stable retail DIY foot traffic
Operating margins stabilize near historical norms as catalog pricing discipline offsets delivery overhead
Logistics capital expenditures taper from peak transformation levels toward maintenance run-rates
Ongoing share repurchases funded entirely through operating cash flow generation
In the Base case, AutoZone achieves Fair value of $2,635.86, representing -5.6% return from $2,792.03 (as of 2026-10-02) with a probability of 60.0%. For this scenario to materialize, comparable store sales must track mid-single-digit expansion, supported by steady domestic retail DIY demand and expanding commercial DIFM market share. Operating profit margins must hold stable as distribution efficiencies offset commercial delivery rollout costs. Capital expenditures must begin tapering from peak logistics transformation levels toward maintenance requirements, allowing annual free cash flow to expand and enabling continued share repurchases. Disconfirmation would occur if commercial route competition forces price cuts or if distribution automation costs remain elevated through FY2028.
Enhanced share repurchases compounding per-share earnings growth into double-digit territory
In the Bull case, AutoZone reaches Potential value of $3,971.65, delivering 42.2% return from $2,792.03 (as of 2026-10-02) with a probability of 20.0%. For this outcome to occur, the rapid deployment of regional mega-hubs must drive accelerated commercial customer adoption, closing the route density gap with direct peers while preserving retail DIY gross margin discipline. Furthermore, store expansion across Mexico and Brazil must accelerate, lifting international contributions, while distribution automation completes ahead of schedule to sharply lower capital intensity. Disconfirmation would arise if commercial account growth stalls or foreign currency devaluation erodes international earnings by FY2028.
Financial performance tracking consensus expectations confirms that retail pricing power remains stable while capital intensity absorbs near-term cash flow, maintaining alignment with Fair value of $2,635.86 relative to $2,792.03 (as of 2026-10-02).
Trigger: Comparable store sales decelerate due to domestic retail DIY weakness, commercial accounts demand substantial price discounting, or distribution center startup expenses cause operating margins to contract sequentially.
Contracting operating margins driven by commercial price competition or logistics cost overruns would impair free cash flow generation and require lowering valuation expectations below Fair value of $2,635.86.
AutoZone exhibits strong earnings quality rooted in consistent cash conversion, where reported net income is backed by substantial operating cash generation. Inventory turnover is tightly managed through centralized supply chains and regional hubs, while accounts payable supplier financing arrangements allow the company to fund working capital needs efficiently without aggressive revenue recognition practices. Working capital discipline and consistent cash collections provide high transparency to core operating earnings.
Metrics to watch into the print
01
Metric:
Mega-Hub SKU Expansion and Same-Day Commercial Availability
CurrentActive deployment of high-density mega-hubs carrying extensive SKU counts across domestic and international trade areas.
Why it matters
Accelerating hub density improves commercial delivery speed and part depth, which drives DIFM commercial customer acquisition and operating leverage across regional store networks.
Maintaining retail pricing power while expanding lower-margin wholesale commercial accounts demonstrates whether distribution automation offsets delivery fleet and labor overhead.
CurrentCapital spending remains elevated to support distribution center automation and regional mega-hub construction.
Why it matters
Transitioning capital intensity from peak transformation buildout toward historical maintenance levels directly unlocks free cash flow for debt service and share retirements.
04
Metric:
International Store Network Unit Economics in Mexico and Brazil
CurrentInternational operations continue expanding store footprint and capturing market share in fragmented Latin American aftermarket regions.
Why it matters
Faster square footage growth in developing automotive markets diversifies revenues away from mature domestic retail DIY and accelerates consolidated top-line growth.
05
Metric:
Debt Refinancing Terms and Share Repurchase Execution
CurrentManagement continues balancing substantial outstanding obligations against ongoing open-market share retirements funded by operating cash flow.
AutoZone demonstrates robust cash generation from operations, delivering $3,117.34M in operating cash flow in FY2025 on $18,938.72M revenue. However, free cash flow contracted to $1,790.08M in FY2025 due to elevated capital expenditures of $1,327.26M (up from $796.66M in FY2023 and $1,072.70M in FY2024). This capital intensity represents 2.16x depreciation as management builds out mega-hubs. As capital spending normalizes toward estimated maintenance capex (~55% of FY2025 capex, or $730M), free cash flow conversion is projected to expand toward $2.5B annually.5,6
AutoZone maintains a highly focused capital allocation strategy centered on reinvesting in high-return mega-hubs and returning all excess capital to shareholders via share buybacks, while maintaining zero dividend payments. In FY2025, the company deployed $1,327.26M into capital expenditures and repurchased $1,578.19M of common stock, reducing outstanding shares from 17.25M diluted average shares in FY2025 to 16.87M shares in FY2026. However, continuous share repurchases have driven balance sheet leverage to $12,447.44M in total debt against $326.12M in cash. With $1,598.60M in debt maturing within one year and a pre-tax cost of debt of 19.80%, capital allocation must balance buybacks against refinancing requirements.
AutoZone's ROIC of 59.57% substantially exceeds its computed WACC of 10.03%. The structural spread is driven by high operating margins (18.31%), negative working capital dynamics enabled by vendor financing, and high inventory productivity. While elevated capital expenditures for mega-hub buildout create temporary asset base expansion, ROIC is expected to remain stable and well above cost of capital as commercial route density improves.
ROIC of 59.57% generates an economic profit spread of approximately 4,954 basis points over the 10.03% WACC, confirming exceptional shareholder value creation.
Capex surge reflects temporary supply chain transformation rather than structural capital drag.
Capex grew from $796.66M in FY2023 to $1,327.26M in FY2025 (2.16x D&A), while operating cash flow remained steady at $3,117.34M.
Near-term free cash flow compression reflects discretionary growth capital investment rather than operational deterioration, creating an impending cash flow inflection as projects mature.
AutoZone Inc. (AZO) trades at 16.5x forward earnings against a peer median of 8.4x. Its EV/EBITDA of 13.4x compares with a peer median of 8.8x. The comparison uses 4 peers: O'Reilly Automotive Inc., BorgWarner Inc., Aptiv PLC and General Motors Company, as of 2026-10-02.
Rising Average Age of the United States Vehicle Fleet
positive
The average age of passenger cars and light trucks in the United States continues to rise, increasing the frequency of mechanical component failures and expanding the addressable repair market.
Commercial DIFM Consolidation and Same-Day Parts Fulfillment Demand
positive
Independent automotive repair facilities increasingly partner with large-scale corporate distributors capable of delivering replacement components within thirty minutes via regional mega-hubs.
Vehicle Electrification and Growing Electronic Component Complexity
neutral
Newer vehicles feature advanced driver-assistance systems, hybrid powertrains, and complex electronics, increasing catalog part counts and requiring greater inventory investment across distribution networks.
Positioning
AutoZone occupies an advantaged competitive position within the retail aftermarket duopoly alongside O'Reilly Automotive. Its retail DIY scale and 52.34% gross margins provide resilient cash flow that funds aggressive expansion into commercial DIFM. While OEM suppliers such as Aptiv (12.68% operating margin), BorgWarner (10.64%), and GM (3.20%) face cyclical production volumes and automaker pricing pressure, AutoZone operates in a non-discretionary repair environment with superior operating margins (18.31% in FY2026).3,4
A pullback to $2,370 - $2,430 provides an 8% to 10% discount to Fair value of $2,635.86, offering an attractive margin of safety to initiate accumulation backed by 18.31% operating margins.
$2,000 - $2,125
Aggressive buy / full position build
A decline to $2,000 - $2,125 represents a 19% to 24% discount to Fair value of $2,635.86, providing an attractive risk-adjusted entry to build a full position despite $12,447.44M in total debt.
Exit tranches
Level
Action
$3,400 - $3,500
Trim 30-40% of position as shares approach external sell-side consensus target of $3,421.87 present value.
$3,900 - $4,000
Full position harvest / exit as valuation reaches Potential value of $3,971.65.
International expansion in Mexico and Brazil ($2,267.11M revenue in FY2025) and commercial mega-hub density provide a multi-year growth runway toward our Potential value of $3,971.65. However, post-earnings estimate revisions in FY2027 revenue and EPS suggest waiting for a discount to Fair value before building additional exposure.7
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Discounted forecast-period cash flows ($650) plus discounted terminal value ($2,108) minus signed net debt per current share ($749) equals the $2,009 lens value shown above. Negative net debt is net cash, so subtracting it raises value.
