We have downgraded the recommendation on AutoZone (AZO) from Outperform to Neutral. This reflects the company’s heavy reliance on private label brands and threats from its vendor consolidation and appreciation in gas prices, which act contrary to significant growth opportunities that exist in each of its businesses such as retail, commercial and ALLDATA. AutoZone is one of the nation’s leading specialty retailers of automotive replacement parts and accessories, operating in the Do-It-Yourself (DIY) retail, Do-It-for-Me (DIFM) commercial and other customer markets. DIY retail sales represented 84% of the company’s revenue in 2008, DIFM commercial sales represented 11% and the remaining 5% generated from other sales. AutoZone sells the ALLDATA brand automotive diagnostic and repair software, and offers ALLDATA repair subscription, ALLDATA online and on DVD, which offers comprehensive factory-correct repair information to DIY customers. AutoZone has a high degree of reliance (50%) on its private ...

• Red Hat (NYSE:RHT) reported fiscal second quarter results of 20 cents a share, compared with Zacks estimates of 11 cents a share, on revenues of $183.6 million, versus estimates of $179.0 million

• Deutsche Bank (NYSE:DB) cut AutoZone (NYSE:AZO) price target to $150 from $175 but maintained its “hold" rating on the stock

• Reports say modifications on the Boeing (NYSE:BA) 787 Dreamliner test plane suggest the first flight is possible by late October or early November

• The corporate head of Microsoft's (NASDAQ:MSFT) Game Studios division ruled out plans to acquire video game publisher Electronics Arts (NASDAQ:ERTS)

• Abbott Laboratories (NYSE:ABT) has offered to buy the drug unit of Belgian's conglomerate Solvay SA

• Deutsche Bank (NYSE:DB) raised its price target for HB Fuller (NYSE:FUL) to $23 from $18, while maintaining its "hold" rating

• Goldman Sachs (NYSE:GS) raised its price target on Buffalo Wild Wings (NASDAQ:BWLD) to $46

• Nintendo lowered its Wii price

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AutoZone (AZO) reported a 3.1% year-over-year fall in its profit to $236.1 million or $4.43 per share for the fourth quarter of its fiscal year ended August 29, 2009. However, excluding the additional week in last year's fourth quarter results, the profit increased from $227.9 million, or $3.63 per share. The company has also managed to come close to the Zacks Consensus Estimate profit of $4.45 per share. Gross profit as a percentage of sales remained 50.3%, the same as the year-ago level. While gross margin was positively impacted through continued leverage of distribution costs due to improved efficiencies and lower fuel costs, it was offset by a shift in merchandise sales mix to lower margin products. Operating expenses as a percentage of sales increased to 31.6% from 31.4% last year. However, excluding the impact from last year's additional week, operating expenses as a percentage of ...

• General Mills (NYSE:GIS) reported fiscal first quarter earnings of $1.28 a share, ex-items, beating Zacks estimates of earnings of $1.03 a share, as sales rose 0.6% to $3.52 billion, above Zacks estimates of $3.52 billion. The company also raised its 2010 earnings guidance to $4.40 to $4.45 a share from its prior view of $4.20 to $4.25 a share

• AMR (NYSE:AMR) announced a private offering of $450 million senior secured notes due 2012

• AutoZone (NYSE:AZO) reported fiscal fourth quarter earnings of $4.43 a share versus $3.88 a year ago, a shade below Zacks estimates of $4.45 a share. Sales of $2.23 billion were above prior year's $2.21 billion and above Zacks projections of $2.23 billion

• Goldman Sachs (NYSE:GS) lifted its price target on Walgreen (NYSE:WAG) to $36 while maintaining a "neutral" rating. Analysts lowered the fourth quarter earnings estimate 2 cents to 38 cents a share, with fiscal year

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For Immediate Release

Chicago, IL – September 21, 2009 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes AutoZone (AZO), Bed, Bath & Beyond (BBBY), General Mills (GIS), KB Home (KBH), Lennar (LEN), Paychex (PAYX), CarMax (KMX), Research in Motion (RIMM) and Texas Industries (TXI). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes 4 stock picks available, free of charge. To see them, go to http://at.zacks.com/?id=5612.

This Week's Events

We will get another look at initial third-quarter results with 11 S&P 500 companies reporting. Included in this group are AutoZone (AZO), Bed, Bath & Beyond (BBBY), General Mills (GIS), KB Home (KBH), Lennar (LEN) and Paychex (PAYX). A total of 33 companies are on the calendar.

The Fed will hold a 2-day

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Overview - Neutral

OPPORTUNITIES

The industry is very concentrated, with the top 8 global automakers having more than 90% of global revenues, and the top 50 global auto parts companies having 80% of global revenues (the top 4 US tire producers have 75% of the US market).

There is a focus on automation and simplifying product lines to lower costs and benefit from economies of scale. The average car now needs only 15-25 man-hours per vehicle, and this drops 2% annually.

Hybrid/alternative cars represent a source of growth in the future. Market share gains by hybrids/alternatives will be slow, and they are now only 4% of cars on the road. General Motors (

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Overview - Neutral

OPPORTUNITIES

The industry is very concentrated, with the top 8 global automakers having more than 90% of global revenues, and the top 50 global auto parts companies having 80% of global revenues (the top 4 US tire producers have 75% of the US market).

There is a focus on automation and simplifying product lines to lower costs and benefit from economies of scale. The average car now needs only 15-25 man-hours per vehicle, and this drops 2% annually.

Hybrid/alternative cars represent a source of growth in the future. Market share gains by hybrids/alternatives will be slow, and they are now only 4% of cars on the road. General Motors (

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For Immediate Release

Chicago, IL - June 25, 2009 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Baker-Hughes (BHI), Weatherford (WFT), AutoZone (AZO), Wyeth, Inc. (WYE) and Pfizer (PFE).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Wednesday's Analyst Blog:

Fed: No Changes

Regarding the economic backdrop, the relative improvement was clearly stated. The Fed painted an accurate picture, describing the ongoing weakness but acknowledging that the rate of deterioration is slowing.

We are gradually moving towards what should become a period of slow growth. As such, investors may

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The Fed made no changes to either its interest rate target or debt purchase programs. No mention was given to potential future rate hikes or a change in the ongoing policy. This was met with some initial criticism, as can be seen by the reversal in stock prices following the announcement. I think the Fed was correct not to discuss any potential hikes. Mortgage rates have started to rise, and though existing home sales have improved for 2 consecutive months, new home sales have been essentially flat since February. Furthermore, both foreclosures and credit card defaults will likely continue to rise throughout the end of the year. Regarding the economic backdrop, the relative improvement was clearly stated. The Fed painted an accurate picture, describing the ongoing weakness but acknowledging that the rate of deterioration is slowing. We are gradually moving towards what should become a ...

The Conference Board's Leading Indicators Index (LEI) broke above 100 and charted its first 6-month increase since April 2007. But is this a sign for rejoicing? Not quite. Though scores above 100 are considered to signal expanding conditions, the LEI is just at 100.2. This is indicative more of stabilization than growth. Furthermore, consumer expectations and building permits contributed to the increase, both of which are a bit suspect. Improvements in both the Conference Board's and the University of Michigan's consumer confidence surveys have been driven by greater optimism over future conditions. These increases were likely aided by the improving stock market. Should the markets stall as friends and neighbors lose jobs, sentiment is likely to falter. Plus, the confidence surveys don't always align with actual spending. Building permits, as my colleague Dirk van Dijk pointed out earlier this week, are problematic. Inventory is the ...