AutoZone Jumps as Drivers Hold On

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AutoZone and other car-part stocks are rising in anticipation of Trump’s tariffs.

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Goldman Sachs upgraded its rating on AutoZone, and the stock has gained roughly 3% in the past five days.

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With new car prices expected to soar by as much as $12,000 on some models, buyers are more likely to hold onto their vehicles longer. This could lead to more trips to the mechanic and a higher demand for replacement parts.

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AutoZone will be hit with tariffs on certain auto parts (engines, transmissions, powertrain parts, and electrical components), but they said they will pass these costs back to consumers. However, consumers find it much easier to absorb the cost of pricier auto parts, often a few hundred dollars, than with the thousands of dollars in price hikes on new vehicles.

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It also helps that consumer demand for auto parts is often a nondiscretionary cost. If a car needs a new engine to stay on the road, consumers have little choice but to pay for the repair.

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The markets anticipate that in the battle of pricey repairs vs. pricey new cars, the wrench wins.