Gas Price Break: AutoZone (AZO)
AutoZone (AZO) — the nation’s largest auto-parts retailer — should get a second wind from lower gas prices, because cheaper gas means people drive more and take longer trips. The number of vehicle miles driven picked up in late 2013. That trend should only accelerate as the economy improves and the unemployment rate comes down.
True, AutoZone must get used to the fact that new car sales are finally bouncing back. Over the last few years, the average age of cars on the road hit record highs, as people were reluctant to shell out for new vehicles.
But there are still plenty of older cars on the road, and they’ll need more frequent servicing to make more and longer trips, especially ahead of the summer driving season. That influx — combined with lower gas prices — should give AutoZone stock a nice shot in the arm.