AutoZone (AZO) is gaining market share by riding on its service and inventory availability, as smaller rivals face heat from higher interest rates, tariffs, and broader macroeconomic challenges, Truist Securities said in a note on Friday.

The automotive parts retailer, much like its peer O'Reilly Automotive (ORLY), is also benefiting from a consumer trend of repairing or fixing vehicles rather than purchasing new ones as higher cost-of-living constrain spending, according to the note.

The brokerage sees the operating environment for smaller companies to become increasingly difficult over time, while it expects AutoZone's inventory accounting pressures to ease over the next few quarters and operating expense growth to slow down as the company continues to aggressively buy back shares.

Truist maintained its buy rating and its price target of $4,045.

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