Yahoo Finanza AutoNation Tops Q4 Earnings Estimates
The Fort Lauderdale-based automotive retailer AutoNation reported better-than-expected earnings and revenue in the fourth quarter, largely driven by robust demand for used vehicles.
U.S. largest automotive retailer reported quarterly adjusted earnings of $5.76 per share, beating the Wall Street consensus estimates of $4.96 per share. The company’s revenue climbed nearly 14% to $6.6 billion from a year earlier. That too surpassed the market expectations of $6.4 billion.
Retail gross profit per used vehicle increased 32% from last year’s quarter to $2,063, while retail gross profit per new vehicle increased 132% to $6,450. But retail sales of new vehicles decreased by 20%. The company reported a net income of $387.1 million in its most recent quarter, up from $151.5 million or $1.73 per share a year earlier, Reuters reported.
AutoNation stock traded 1.28% to $108.30 on Friday. The stock fell over 7% so far this year after surging over 67% in 2021.
Analyst Comments
“GPC and AutoNation (AN) both posted Q4 sales and EPS “beats” on ongoing surge in auto spend. GPC saw strong automotive service demand domestically and internationally, with strength carrying into Q1 thus far, as mgmt sees ~MSD% gains on pricing carrying into ’22,” noted Bret Jordan, Equity Analyst at Jefferies.
“Concurrently, AutoNation (AN) posted another record profit as supply shortages and robust demand drove record pricing and margins. We expect similar trends remain through ’22 as personal auto spend remains at record levels.”
AutoNation Stock Price Forecast
Two analysts who offered stock ratings for AutoNation in the last three months forecast the average price in 12 months of $178.50 with a high forecast of $220.00 and a low forecast of $137.00. The average price target represents a 64.52% change from the last price of $108.50. Those two analysts rated “Buy”, according to Tipranks.
Morgan Stanley gave the base target price of $103 with a high of $181 under a bull scenario and $57 under the worst-case scenario. The investment bank gave an “Equal-weight” rating on the automotive retailer’s stock.
“We are optimistic about the trajectory for new CEO, Mike Manley, previously in various leadership roles at FCA and Stellantis where he demonstrated leadership of highly complex organizations going through transformation changes in scale, scope and technology. Omni-channel strategy unclear and may result in loss of share,” noted Adam Jonas, Equity Analyst at Morgan Stanley.
“For New Vehicles, historically, market share & gross profit per unit have declined. For Used Vehicles, the standalone used car business model was unsuccessful in the late 1990s. The business mix / growth / margins are similar to the other traditional auto dealers, and the stock trades at a discount to its historical average and vs the dealer average.”
Several analysts have also updated their stock outlook. Jefferies cut the target price to $118 from $136. Wells Fargo initiated coverage with an overweight rating and set the price target at $135. BofA slashed the price objective to $220 from $228.
Technical analysis suggests it is good to hold as 100-day Moving Average and 100-200-day MACD Oscillator giving a mixed signal.
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This article was originally posted on FX Empire
