Earnings Previews: AutoZone, SAIC, Signet Jewelers

AutoZone in October authorized an additional $2.5 billion share repurchase, on top of a $2 billion program announced in March. Since fiscal 2018, AutoZone has cut the number of shares outstanding from around 27 million to around 20 million through share buybacks. Over the same period, the cost of stock-based compensation has risen from around $43.3 million to $70.6 million, and cash spent on stock repurchases for the period totals around $7.9 billion.

Of 24 analysts covering the stock, 16 have a Buy or Strong Buy rating and six more have Hold ratings. At a recent share price of around $2,553.00, the shares have outpaced the median price target of $2,475.00. At the high target of $2,850.00, the upside potential is 11.6%.

The revenue forecast for the company’s first quarter of fiscal 2023 is $3.86 billion, which would be down 27.9% sequentially but up 5.2% year over year. Adjusted EPS are forecast at $25.54, down 37.7% sequentially and 14.7% higher year over year. For the full fiscal year ending in August, analysts anticipate EPS of $124.10, up 5.9%, on sales of $16.25 billion, up 5%. Revenue and EPS are highly seasonal, with about 30% of revenue and more than 35% of EPS coming in the fourth quarter.

AutoZone stock trades at 20.6 times expected 2023 EPS, 17.8 times estimated 2024 earnings of $143.79 and 16.1 times estimated 2025 earnings of $158.61 per share. The stock’s 52-week trading range is $1,703.32 to $2,610.05. The company does not pay a dividend. Total shareholder return for the past year was 36.7%, including a buyback yield of 8.76%.


Science Applications International Corp. (NYSE: SAIC) received 98% of its 2022 fiscal year revenue from federal government contracts. The company provides a variety of IT services to a number of federal agencies, including the military, NASA, the State Department and the Department of Homeland Security. The company reports quarterly results on Monday morning.

The National Defense Authorization Act for fiscal 2023 is currently stalled in the House and may be delayed until the new Congress is sworn in next year. The Senate version released in mid-October came in $44 billion above the Pentagon’s requested budget of $813.4 billion, and that gave SAIC (and other defense contractors) a share price boost.

There are 10 analyst ratings on SAIC’s stock, and just three of those are Buy or Strong Buy. At a share price of around $109.70, the stock has outrun its median price target of $99.00. At the high target of $120.00, the upside potential is about 8.6%.

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