AutoZone, Inc. (AZO) shares rose nearly 7% during Tuesday's session after the company reported better-than-expected first quarter financial results. The stock has more than doubled since July 2017, and CEO William Rhodes believes that the company will see sales growth moving forward at a rate that is higher than historical levels.

Revenue rose 5.7% to $2.79 billion, beating consensus estimates by $20 million, and earnings per share came in at $14.30, beating consensus estimates by $0.53. Same-store sales rose 3.4% to surpass consensus expectations of a 2.6% gain, but gross profit margins were flat at 53.7% as operating expenses rose 60 basis points to 35.8% for the quarter.

Analysts reacted favorably to the first quarter earnings report. Nomura Instinet maintained its Buy rating and raised its price target to $1,345, saying that EBIT dollar growth should accelerate over the coming quarters. Wolfe Research also upgraded AutoZone stock from Underperform to Peer Perform following the better-than-expected financial results.

Chart showing the share price performance of AutoZone, Inc. (AZO)

From a technical standpoint, AutoZone stock broke out from trendline resistance at around $1,190 to fresh 52 week highs. The relative strength index (RSI) moved to overbought levels with a reading of 74.78, but the moving average convergence divergence (MACD) experienced a bullish crossover. These indicators suggest that the stock could experience some near-term consolidation, but the intermediate-term trend remains higher.

Traders should watch for some consolidation above trendline support levels near $1,190 or R2 support at $1,217.35 over the coming sessions. If the stock breaks down from these levels, traders could see a move toward the 50-day moving average at $1,137.14 or the 200-day moving average at $1,085.14, although the robust fundamental and technical performance of the stock suggests that a move higher is more likely to occur.

The author holds no position in the stock(s) mentioned except through passively managed index funds.